The most popular way to buy cryptocurrency is to use a centralized exchange. Such platforms are focused on providing safety and convenience for users. Centralized crypto exchanges (CEX) have a central regulation that ensures a high level of security for investments and users’ data. For this, they need to know their customers and block any illegal or suspicious activity. So when you first come to a CEX, you must pass registration and verification procedures. Most platforms allow simple functions like spot trading without verification, but you will face limitations on withdrawing money in this case.
To access a full range of trading tools and features of a cryptocurrency exchange, you will need to pass KYC (know-your-customer). That means you need to provide your ID and documents for checking. It may take a few days, but in the end, you will be able to use all the functions and advantages of an exchange. This can be:
- staking
- future trading
- trading with leverage
- etc.
Thus, having passed the KYC procedure, you receive a full range of trading tools, advanced features, increased limits, customer support, etc.
Now let’s talk about a crypto exchange without ID verification.
Decentralized Crypto Exchange (DEX)
DEX does not require KYC and even registration. Transactions are carried out through smart contracts, users’ funds do not remain on the exchange but move between users’ wallets. On the one hand, this helps to stay anonymous, but on the other hand, DEX does not promise safety for transactions and does not protect against hacker attacks or any other possible illegal actions. Usually, experienced traders have accounts on CEX and also use DEX. But it requires practice and knowledge, for DEX is more complicated and hard to handle. Besides, DEX does not offer as many earning opportunities and trading tools as CEX does. Read more about CEX and decentralised cryptocurrency exchange on the White Blog.