Explore Cryptos

A centralised exchange (CEX) is a company-operated platform that allows users to buy, sell, and trade cryptocurrencies. The exchange manages the trading infrastructure and, when users keep their assets on the platform, may also hold those assets in custody. Examples of common CEX services include spot trading, INR deposits and withdrawals, crypto transfers, staking, and derivatives.

For many beginners, a centralised exchange can be easier to start with because the experience is closer to traditional financial apps. Features such as INR deposits, KYC-based accounts, order books, and customer support can make the first steps into crypto simpler. A DEX, on the other hand, generally requires users to manage their own wallet and interact directly with blockchain-based protocols. Neither option is automatically better. The right choice depends on how comfortable you are with crypto wallets, self-custody, blockchain transactions, and the responsibilities that come with them.

An exchange token is a crypto token associated with a particular crypto exchange or its broader ecosystem. These tokens can have different uses. They may provide trading fee benefits, give holders access to certain features, support ecosystem applications or be used in governance. BNB, for example, has developed beyond its original exchange-focused use case and is now closely connected to the wider BNB Chain ecosystem. The value of an exchange token ultimately depends on factors such as demand, utility, token supply, the growth of its ecosystem, and broader market conditions.

Exchange tokens can derive value from a combination of utility, demand, and the activity surrounding their ecosystems. Depending on the token, utility can include trading fee discounts, access to platform features, participation in ecosystem applications or other benefits. Supply also matters. Changes to the token's circulating supply, including mechanisms such as burns, can influence market dynamics. But utility alone does not guarantee that a token will increase in price. Like other crypto assets, exchange tokens are subject to market sentiment, competition, regulation, and wider crypto market conditions.

A token burn involves permanently removing tokens from circulation, usually by sending them to an address from which they cannot be recovered. The purpose is generally to reduce the available supply of a token. BNB has used token-burning mechanisms as part of its token economics, while other exchange tokens can have their own approaches to managing supply. A reduction in supply can affect the supply and demand balance, but a token burn does not automatically mean the price will increase. Demand for the token remains an important part of the equation.

Keeping crypto on a CEX means you are relying on the exchange to safeguard your assets and process withdrawals. Reputable exchanges typically use security measures such as cold storage, multi-factor authentication, withdrawal controls, and monitoring systems. However, no exchange is completely free from risk. Users should consider factors such as the exchange's security track record, regulatory status, custody practices, and withdrawal policies. For larger or long-term holdings, some users prefer self-custody, where they control the private keys themselves. That comes with its own responsibilities and risks. The basic principle is simple: an exchange can make crypto easier to use, but keeping your assets there means accepting counterparty risk.

Crypto platforms providing certain virtual digital asset-related services in India may fall under the Financial Intelligence Unit India (FIU-IND) framework for anti-money laundering compliance. The list of registered entities can change as platforms register, update their status, or face regulatory action. Indian users should therefore check the latest FIU IND information before choosing an exchange rather than relying on an old list published elsewhere. Registration with FIU IND should also not be interpreted as a guarantee that an exchange is risk-free or that users' assets are protected from market or operational losses.

If a CEX supports INR deposits, the process generally involves completing KYC, linking an eligible bank account or payment method and transferring INR to the exchange through the supported payment route. Once the funds are credited, they can potentially be used to purchase supported crypto assets. The exact process, payment methods, limits and fees vary between platforms. Indian users should also check whether the exchange currently supports INR deposits and withdrawals before transferring funds.

Centralised exchanges generally require Know Your Customer (KYC) verification because they operate as identifiable financial service businesses and can be subject to anti-money laundering and customer identification requirements. KYC typically involves verifying information such as your identity and address. For users, this can feel like an extra step compared with using a decentralised protocol. However, it is an important part of how regulated or compliance-focused crypto platforms operate.

The collapse of FTX in November 2022 became one of the biggest failures in the history of the crypto industry. FTX was a major centralised crypto exchange, and its failure highlighted the risks that can arise when users trust a platform with custody of their assets. The events surrounding FTX also raised serious questions about the relationship between the exchange and affiliated entities, the use of customer funds, and the company's financial controls. For CEX users, the lesson goes beyond FTX itself.