CEX Security: How to Stay Safe on Centralized Crypto Exchanges

When you trade on a centralized exchange, a platform that holds your crypto for you and manages your trades like a bank. Also known as CEX, it’s the most common way people buy and sell crypto—but it’s also where most losses happen. If you leave your coins on Binance, Coinbase, or any other CEX, you’re trusting someone else to keep them safe. That’s not the same as holding your own keys. And when exchanges get hacked, get shut down, or get greedy, your funds can vanish overnight.

CEX security isn’t just about two-factor authentication or fancy logos. It’s about cold storage, the practice of keeping the majority of user funds offline, away from hackers. Also known as offline wallets, this is the bare minimum any serious exchange should use. Look for exchanges that publish regular proof-of-reserves audits—real, third-party checks that show they actually have the crypto they claim to hold. Most don’t. And those that do? They’re the ones you can trust. Then there’s insurance funds, a pool of money set aside to cover losses if an exchange gets breached. Also known as SWEAT (Secure Wallet Emergency Assurance Trust), this isn’t a guarantee, but it’s better than nothing. Binance had one. FTX didn’t. That’s why you lost money there.

Don’t ignore the human side of CEX security. Phishing emails, fake support chats, and fake app downloads are how most people get hacked—not because the exchange was weak, but because they clicked the wrong link. Always double-check URLs. Never enter your recovery phrase anywhere except your own hardware wallet. And if an exchange offers you a "guaranteed return" or pushes you to deposit more, run. Real platforms don’t need to sweet-talk you into giving them your crypto.

What you’ll find below are real reviews of exchanges that failed, tools that worked, and airdrops that turned into traps—all tied to the same core problem: CEX security. Some posts show you how a platform vanished without warning. Others break down how to spot a fake audit. A few even explain why holding your own crypto is still the safest move. These aren’t theory pieces. They’re post-mortems, checklists, and warnings from people who lost money—and learned the hard way.