Definition ∞ CeFi functionality refers to the services offered by centralized cryptocurrency platforms. These services replicate traditional financial operations, such as lending, borrowing, and trading, but utilize digital assets. Centralized entities manage user funds and execute transactions, providing a familiar interface and customer support. This approach often involves regulatory compliance and KYC/AML procedures.
Context ∞ The discussion surrounding CeFi functionality frequently centers on the balance between user convenience and the risks associated with custodial control. Recent market events have highlighted the importance of transparency and robust risk management within CeFi platforms. Future developments may involve increased regulatory oversight and improved security measures to protect user assets.
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