A centralised exchange (CEX) is a crypto exchangeCrypto exchangeA company or platform where you buy, sell and swap crypto, for example with krónur. run by a company. The company manages accounts, accepts deposits, carries out trades and holds the crypto. Most people buy their first crypto on a centralised exchange.
How does a centralised exchange work?
You deposit money, for example krónur from your bank account, and buy crypto in an app or on a website. The crypto is credited to your account, but the company holds it and manages the private keysPrivate keyA secret number that proves you own the crypto in your wallet. Whoever holds the private key controls the crypto.. In other words, it acts as your CustodianCustodianA company that holds crypto and the keys to it on behalf of customers, such as a licensed crypto exchange..
It works much like a bank account. You see your balance in online banking, but the bank holds the money.
Pros and cons
The advantages are simplicity and service. You can buy with krónur, get help and recover your account if you forget your password. A centralised exchange licensed under MiCA is supervised and must keep customer assets separate from its own.
The downside is that you have to trust the company. If it is badly run or hacked, assets can be lost. The best-known example is FTX, one of the world's largest exchanges, which went bankrupt in November 2022. Its customers were left unable to reach their assets. That is why licensing and supervision matter. Some people move their crypto into Self-custodySelf-custodyHolding the private keys to your crypto in your own wallet, so nobody else controls it but all the responsibility for the keys is yours. so they don't have to trust anyone else with it.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.