Crypto exchange: how it works and what to check before you choose one

A cryptocurrency exchange is an online platform that connects buyers and sellers of crypto-assets. Two types are usually distinguished: centralized (CEX), run by a company that holds customer funds and matches orders, and decentralized (DEX), which runs on smart contracts. Exchanges offer a spot market, meaning purchases at the current price, and often leveraged contracts as well.

When choosing an exchange, check whether it is authorized to provide crypto-asset services in the EU, how it safeguards funds, what fees it charges and how much liquidity it has. A centralized exchange means counterparty risk: your money is with the operator, so an outage, hack or bankruptcy can hit customers. Keeping all your capital on an exchange is a common beginner mistake.