> For the complete documentation index, see [llms.txt](https://ubit.gitbook.io/ubit/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ubit.gitbook.io/ubit/background/centralized-exchange.md).

# Centralized Exchange

Centralized exchanges (sometimes referred to as CEXs) are well-known entry points to the crypto ecosystem. Binance, Coinbase, and Kraken are just a few examples of centralized exchanges. Centralized exchanges typically have their own order books that record and verify all cryptocurrency-related transactions.

Before diving into centralized exchanges, let’s first define what a centralized exchange is:

A centralized exchange is a platform that enables traders to buy, sell and exchange cryptocurrencies with fiat or other cryptocurrencies.

They are token marketplaces, vital to the ecosystem, as many of them support fiat currencies for payments (non-cryptocurrency holders are able to buy cryptocurrencies using dollars, euros, and other currencies). This often provides an easy entry point into the crypto ecosystem, and the recent trend towards strong KYC requirements allows for minimizing the number of bad actors.

Centralized exchanges are often trusted intermediaries as they monitor and facilitate crypto transactions. A trustworthy cryptocurrency exchange should also allow you to securely store your coins and fiat currencies, thus acting as a custodian.

View the order book of the centralized exchange, the information is passed internally through an efficient network and protected by comprehensive security mechanisms. Currently, the leading centralized exchanges have an \[extensive built-in] know-your-customer policy. In addition, to avoid financial fraud, some centralized exchanges have established strong compliance and investigation teams over the years, and work closely with global regulators to prevent crimes. This has clear advantages over decentralized exchanges.