There are two main crypto platforms: centralized (CEX) and decentralized exchanges (DEX). CEX are exchanges that operate officially. When users deposit their funds, they store them on CEX servers. That means that CEX is highly concerned about users’ funds’ security. To provide maximum safety for clients, CEX implements complex mechanisms on both the exchange level and the level of users’ accounts.
CEX always provides different trading tools and earning opportunities for registered users. They are available after passing KYC verification and registration.
KYC means “know your client”. It implies that the user sends documents and ID to an exchange office for checking. If no illegal activity was noticed in the past, one may proceed with registration and use all the tools available on the platform. CEX allows linking a bank card to your account, buying digital assets with fiat, converting crypto into fiat, and cashing them out through your card.
Examples of CEX:
Decentralised Cryptocurrency Exchange
Such platforms have no central regulatory body that would track the user’s transactions and keep track of illegal activities. Of course, DEX implies no verification and sometimes even no registration needed. That’s a cryptocurrency exchange without KYC. It means that users conduct transactions and deals directly between their wallets. Smart contracts are at the core of DEX. They execute transactions and, at the same time, have no control over coins. Users’ funds move between their wallets and do not stay on the exchange. In turn, the platform is not responsible for clients’ investments and transaction safety. On DEX, it is impossible to buy crypto with fiat.
P2P Cryptocurrency Exchange
P2P platforms have features of CEX and DEX. On P2P, you can also buy crypto with fiat, but you will most likely need to register. On the other hand, you are the only one who knows the private keys to your account.
To learn more about CEX and DEX, read the White blog. It describes all the peculiarities of these types of platforms and explains their advantages.