Decentralized Exchanges or in short DEXes are believed to have risen as alternatives to the challenges presented by centralized exchanges. These challenges include vulnerabilities to hack, unclear account management, in some cases obligatory KYC verifications and control over private keys.
Yet centralized exchanges play an important role in serving as gateways for starters into the world of crypto acting as guides into this new industry.
The risks with the centralized exchanges could prove fatal for customers investments in terms of platform's collapse like what we have seen with the collapse of FTX left users lose millions of dollars with the exchange's collapse. And it's not only about FTX, other crypto platforms also have collapsed.
Irrespective of the fact that centralized exchanges are probably easy to use and more friendly to users who are new to the crypto industry but it comes with its own drawbacks. If a centralized exchange suspends a token transaction for an unknown period I don't think you could do anything in order to withdraw that token.
And this is something I have experienced on Binance crypto exchange, luckily the token suspension wasn't prolonged and the suspension was uplifted in probably a day, two or so (can't remember). But again, in time of immediate need, what else you could do if you needed cash and exchange has suspended a particular token you wanted to withdraw.
Some people may not like doing KYC at certain exchanges but I guess that shouldn't be an issue for them as far as they are not doing stuffs that ain't legal. Probably they are more concerned about their privacy data, which does make some sense.
But if these centralized exchanges were regularized by authorities, they might attract more users giving them a sense of security. So we do want friendly regulations of crypto platforms.
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