kaal:claim:3936876-012

Cryptocurrency exchanges store digital assets or private keys in internet connected hot storage because their main function is to provide liquidity rather than custody, unlike registered legacy stock exchanges which facilitate trading without taking custody.

Source quote, verbatim

Because the main function of digital asset exchanges is to provide liquidity – not to provide custody - cryptocurrency exchanges typically store digital assets or private keys in hot storage, that is in wallets that are connected to the Internet.

From

Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021), II.2.a Hot Storage, p. 16
https://ssrn.com/abstract=3936876 · source PDF

Cite as

Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876

Holds when

centralized cryptocurrency exchanges

Classification

mechanismsupport: argueddefi

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