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Crypto exchange
A crypto exchange is a company or service where people buy, sell and trade crypto, often for dollars or other government money. Most hold customers' coins for them and record who owns what in their own books.
What it means for you. Coins left on an exchange are held by the company, and FINRA notes that crypto trading platforms are not registered with the SEC and lack the protections of stock exchanges or brokers. The FTC notes crypto in accounts is not government-insured like an FDIC bank deposit. Check whether you can withdraw to your own wallet, and what that costs.
Sources: FINRA: Crypto Assets, FTC: What To Know About Cryptocurrency and Scams, IMF: Regulating the Crypto Ecosystem (Fintech Note 2022/007), FSOC: Report on Digital Asset Financial Stability Risks and Regulation 2022 · checked 4 October 2026
DEX
A DEX (decentralized exchange) is an app that lets you swap one token for another directly from your own wallet, with smart contracts matching and settling the trade. No company holds your funds before or after the swap.
What it means for you. You keep custody, but you also carry every check yourself: anyone can create a token with a familiar name, so confirm the contract address before swapping. Swaps cost a network fee even when they fail, prices can move against you while the trade is pending, and a completed swap cannot be reversed.
Sources: ethereum.org: Get ETH (centralized and decentralized exchanges), ECB Macroprudential Bulletin: Decentralised finance, Uniswap docs: Swaps · checked 4 October 2026