A centralized exchange, often referred to as a CEX, is a specific kind of digital asset exchange that operates under the control and management of a single company or organization. It serves as an intermediary between individuals looking to buy and sell digital assets, facilitating the trading process for them.

In a centralized exchange, users transfer funds into the exchange's wallets, and the exchange takes on the responsibility of holding and managing the assets for the users. The exchange keeps track of all the buy and sell orders and matches them to complete trades. It is called the order book mechanism.