Custody and cash · 18 / 86

Exchanges and custody

An exchange is a company in the middle. You deposit, you trade, you withdraw. Those are three different steps.

Their keys

While the coins are deposited, the exchange can move them. Your screen shows an IOU in their database. The chain may show the exchange's wallets, not an address that is yours alone.

The three steps

A deposit can sit pending. A trade can happen inside their system without a personal on-chain transfer. A withdrawal is when you ask them to send coins to a wallet you control.

Until the withdrawal confirms in a wallet you control, they can still freeze the account.

Check yourself

Is an exchange balance a wallet you control?

No. It is their account entry until you withdraw.

After this you can say whether a balance is an IOU or coins in a wallet you control.

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