Exchange
Crypto exchange: A crypto exchange is a platform where you buy, sell and trade cryptocurrencies, either for Australian dollars or for other crypto. Centralised exchanges are run by a company that holds customer funds, while decentralised exchanges let you trade from your own wallet using smart contracts.
Centralised vs decentralised exchanges
A centralised exchange (CEX) holds your funds in custody, matches orders on an order book and usually requires identity checks. In Australia, exchanges must register with AUSTRAC. A decentralised exchange (DEX) runs on a blockchain: you connect a self-custody wallet and trade against liquidity pools or on-chain order books, keeping control of your keys but taking on smart contract risk.
Exchange vs broker
On an exchange you trade with other users at market prices through an order book. A broker sells you crypto from its own inventory at a quoted price, often simpler to use, with the cost built into the spread between the buy and sell price. Checking the spread as well as the stated fee shows what you really pay.
Frequently asked questions
Is a DEX safer than a centralised exchange?
It removes the risk of the exchange holding your funds, but adds smart contract and user error risk. Each suits different needs.
Do I need to move crypto off an exchange?
Many investors move long-term holdings to a wallet they control so they hold their own keys.