What is a crypto exchange?
A crypto exchange is a platform where you buy, sell and trade cryptocurrencies. There are two fundamentally different types: CEX (Centralized Exchange) and DEX (Decentralized Exchange). The choice depends on your goals — beginners are better off starting with a CEX, while experienced users combine both.
CEX — Centralized exchanges
A company controls the platform, holds your funds and conducts KYC. Examples: Binance, OKX, Coinbase, Kraken.
- Advantages: intuitive interface, fiat deposits, support, high liquidity, fund protection (SAFU funds)
- Disadvantages: custodial (exchange holds keys), mandatory KYC, risk of exchange hack or bankruptcy (FTX 2022)
DEX — Decentralized exchanges
Smart contracts control everything — no company, no KYC, no custodial risk. Examples: Uniswap (ETH), Jupiter (SOL), PancakeSwap (BNB), Curve (stablecoins).
- Advantages: non-custodial, no KYC, access to all tokens, 24/7 without restrictions
- Disadvantages: no fiat on-ramp, more complex for beginners, gas fees on ETH mainnet
When to use which?
- Buying with cash/card → CEX (Binance, OKX) — only option for fiat entry
- New/small altcoins before CEX listing → DEX only option
- DeFi activities → DEX mandatory
CEX security — lessons from the FTX collapse
FTX went bankrupt in November 2022 — users lost billions. Lesson: don't hold more on a CEX than you need for active trading. Keep the rest in your own non-custodial wallet. "Not your keys, not your coins."