A centralized exchange (CEX) is a cryptocurrency exchange run by a central authority. This implies that the exchange controls and administers all transactions, and users must rely on the exchange to properly handle their funds and perform deals. To establish an account, customers must go through a KYC (know your customer) process, which entails supplying personal information and identity papers.
Users deposit their digital assets into the exchange’s wallets on a centralized exchange. The exchange then connects buyers and sellers to complete deals. Centralized exchanges often have more enormous trading volumes and more trading pairs than decentralized exchanges, and they frequently include more complex trading tools like margin trading and stop-loss orders.
Furthermore, centralized exchanges are frequently more regulated and provide more security precautions than decentralized exchanges.
Centralized Exchanges’ Drawbacks
However, the concentration of these exchanges has several drawbacks. Users are exposed to hacking and other sorts of theft since they commit their possessions to the exchange. Furthermore, centralized exchanges are regulated and may be vulnerable to government interference or even confiscation.
Overall, centralized exchanges are a popular alternative for people seeking a more conventional trading experience, as they provide a more comprehensive range of currencies, better trading capabilities, and enhanced security. However, before selecting an exchange, you should always research and evaluate aspects like security, fees, and available currencies.
7 Best Centralized Exchanges (CEX) In 2023 With Pros & Cons
Binance
It is one of the largest and most popular exchanges noted for its wide coin variety and inexpensive trading costs. Binance is a Malta-based exchange that was created in 2017.
It swiftly expanded to become one of the world’s most popular cryptocurrency exchanges. Binance boasts an easy-to-use interface, many trading pairings, and minimal trading costs.
Binance also offers its cryptocurrency, Binance Coin (BNB), that may be used to pay for trading costs at a reduced rate. Binance’s security is one of its main advantages; the exchange has never been hacked.
Pros
Large selection of coins
Low trading fees
User-friendly interface
Strong security measures
Binance Coin (BNB) which can be used to pay for trading fees at a discounted rate
A wide variety of trading pairs
Cons
Not available to residents of the US and some other countries
Some users have reported difficulty navigating the website and spotty customer service
Coinbase
It is a well-established and reputable exchange based in the US, known for its easy-to-use platform and robust security.
Coinbase is a well-known exchange that has been in business since 2012 and has served over 30 million users globally.
The exchange is simple and provides several trading pairings, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Coinbase accepts a wide range of fiat currencies, making it simple for customers to purchase and sell bitcoin.
The exchange is well-known for its stringent security procedures, which include two-factor authentication, insurance, and a 98% cold storage policy.
Pros
Easy to use
Strong security measures
Supports fiat currencies
Reputable and well-established
Cons
Relatively high fees compared to some other exchanges
A limited selection of coins compared to other exchanges
Coinbase has had some issues with frozen accounts and slow customer service in the past
Kraken
An exchange established in the United States is noted for its strong security and low costs. Kraken is a cryptocurrency exchange that was formed in 2011. It is situated in San Francisco, California, and is noted for its strong security and cheap costs.
The exchange provides a wide range of trading pairs and margin trading opportunities. Kraken also offers an extensive range of order types, making it a popular choice among traders.
Pros
High security
Low fees
Margin trading available
Wide variety of trading pairs
Wide variety of order types
Cons
Not as many coins available as on some other exchanges
Some users have reported difficulty navigating the website and spotty customer service
Bybit
Bybit is a cryptocurrency exchange established in Singapore that specializes in derivatives trading, such as futures and options. It was created in 2018 and has quickly risen to become one of the most popular trading platforms for digital assets.
Bybit is a popular alternative for traders due to its user-friendly interface and the vast number of order types; it also offers a mobile app. Furthermore, Bybit provides many order types, making it a popular choice among traders.
The exchange offers an extensive range of trading pairs and minimal trading costs. Furthermore, Bybit provides many order types, making it a popular choice among traders. Bybit is also well-known for its robust security features, which include two-factor authentication, insurance, and a 98% cold storage policy.
It’s vital to remember that Bybit is a derivatives trading platform. Instead of buying and selling an asset directly, customers trade contracts that enable them to bet on its future price.
This sort of trading is more complicated and involves higher risk. It’s also worth noting that Bybit is only available to residents of the United States and a few other countries, and it’s always a good idea to conduct your research and evaluate aspects like security, fees, and the coins available before deciding on an exchange.
Pros
High leverage options up to 100x
Low trading fees
Advanced trading platform with a wide range of order types
Strong security measures, including multi-signature wallets and cold storage
24/7 customer support
Mobile app available
Cons
Limited selection of coins compared to some other exchanges
Limited to derivatives trading, does not offer spot trading
Not available to residents of the US and some other countries
Bitstamp
A well-known European exchange noted for its high security and fiat currency support. Bitstamp is a cryptocurrency exchange created in 2011, is situated in Luxembourg, and is recorded for its robust security and support for fiat currencies.
The exchange provides an extensive range of trading pairs and minimal trading costs. Furthermore, Bitstamp offers a comprehensive range of order types, making it a popular choice among traders.
Pros
Strong security
Support for fiat currencies
Wide variety of trading pairs
Low trading fees
Wide variety of order types
Cons
Not as many coins available as on some other exchanges
Bitstamp has had some issues with frozen accounts and slow customer service in the past
Huobi
A Singapore-based exchange is well-known for its diverse coin assortment and minimal trading costs. Huobi is one of Asia’s most popular cryptocurrency exchanges; it was formed in 2013, is situated in Singapore, and is recognized for its diverse coin selection and inexpensive trading costs.
The exchange provides an extensive range of trading pairs and minimal trading costs. Huobi also offers a comprehensive range of order types, making it a popular choice among traders.
Pros
Wide selection of coins
Low trading fees
Wide variety of trading pairs
Wide variety of order types
Cons
Not available to residents of the US and some other countries
Some users have reported difficulty navigating the website and spotty customer service
Huobi has had some issues with frozen accounts and slow customer service in the past
OKEx
A Malta-based exchange was well-known for its diverse coin offering and margin trading possibilities. OKEx is one of the world’s most popular cryptocurrency exchanges. It was formed in 2014, is situated in Malta, and is recognized for its extensive range of currencies and margin trading options.
The exchange provides an extensive range of trading pairs and minimal trading costs. Furthermore, OKEx offers a comprehensive range of order types, making it a popular choice among traders.
Pros
Wide selection of coins
Margin trading options
Wide variety of trading pairs
Low trading fees
Wide variety of order types
Cons
Not as user-friendly as some other exchanges
Some users have reported difficulty navigating the website and spotty customer service
OKEx has had some issues with frozen accounts and slow customer service in the past
Please keep in mind that this is not an exhaustive list. Before deciding on an exchange, conducting your research and evaluating issues such as security, fees, and available currencies is vital.
Also, restrictions and exchange availability may differ depending on the region. Remember that the crypto market is very volatile, so today’s best exchange may not be the best tomorrow.
