A single company holds your crypto and matches your trades, convenient, but you don’t actually control the keys.
A centralised exchange (CEX) works much like a traditional brokerage: you deposit funds, the exchange custodies them, and it matches your buy and sell orders internally. This makes CEXs easier for beginners, you can buy crypto directly with regular currency, and the exchange handles the technical complexity.
The trade-off is custody: the exchange holds your private keys, not you. If it’s compromised, mismanaged, or restricts withdrawals, your funds are exposed in a way they wouldn’t be if you controlled them yourself.