A CEX (Centralized Exchange) is a cryptocurrency trading platform operated by a company that acts as an intermediary between buyers and sellers. These exchanges custody user funds, maintain order books, provide liquidity, and offer features like fiat on-ramps, customer support, and regulatory compliance. While CEXs offer convenience and high liquidity, they require users to trust the platform with their assets and personal information.
Example:
Coinbase is a CEX where users deposit dollars from their bank account, and the exchange converts it to Bitcoin at the current market price. The exchange holds both the user's dollars and Bitcoin, charges a trading fee and provides tax reporting documents at year-end.