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An exchange wallet is cryptocurrency wallet infrastructure used by an exchange to receive, hold, and send crypto assets. Centralized exchanges may use such wallets to manage assets belonging to many customers.
A user may receive a dedicated deposit address, while the exchange may technically manage the assets through a larger address system or pooled wallet architecture. Once a transaction receives the required confirmations, the exchange can credit the corresponding internal balance.
Exchanges may use hot and cold storage systems. Key management is a critical part of custody security because compromise of wallet infrastructure can result in asset loss. This also illustrates the distinction between custodial exchange storage and self-custody.
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