What Is the Difference between Front-Running in CEXs and DEXs?

In Centralized Exchanges (CEXs), front-running involves an exchange employee or affiliated party using confidential, non-public client order information for personal profit. This is generally illegal and prohibited by securities laws.

In Decentralized Exchanges (DEXs), front-running is algorithmic and exploits the public visibility of pending transactions in the mempool. DEX front-running is often a form of MEV and, while criticized as unethical, its legality is complex due to the lack of a central fiduciary duty.