Disadvantage of centralize exchange

- Reliance on a trusted third party increases the risk of security breaches and potential loss of funds.

- Centralized exchanges hold custody of user funds, creating counterparty risk and vulnerability to hacks or internal fraud.

- KYC verification compromises user privacy and exposes personal information to potential breaches.

- CEXs can be subject to regulatory actions, leading to frozen assets or restricted access.

- Limited control over trading activities, as CEXs may impose restrictions on trading pairs, withdrawal limits, and trading strategies.

- Lack of transparency in price discovery, as centralized exchanges determine their own prices, potentially leading to price manipulation.