Centralized exchanges (CEXs) work much like a stock brokerage: the company holds custody of user funds, matches buy and sell orders, and typically requires identity verification. Decentralized exchanges (DEXs) instead let users trade directly from their own non-custodial wallets via smart contracts, with no company taking custody of funds — but also generally no customer support or dispute process if something goes wrong.

For founders and investors, the practical question when choosing or evaluating an exchange is whether it’s actually licensed to operate where its users live. An exchange operating without local authorization can still be technically accessible to users, but that doesn’t mean it’s legally serving them, and users of unlicensed platforms typically have far less recourse if the platform fails or is hacked.

🇵🇭 Philippine Example

In the Philippines, crypto exchanges are regulated by the BSP as Virtual Asset Service Providers (VASPs) under Circular No. 1108 (2021). As of mid-2025 there were around nine actively licensed VASPs, including Coins.ph (Betur Inc.) and PDAX — but the BSP has kept new VASP license applications under an extended moratorium since 2021, most recently reaffirmed in an August 2025 memorandum. Separately, the Philippine SEC has issued advisories naming foreign exchanges — including OKX, Bybit, MEXC, KuCoin, Bitget, Phemex, CoinEx, BitMart, Poloniex, and Kraken — as operating in the Philippines without proper local registration under its 2025 Crypto-Asset Service Provider rules.

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