kaal:claim:3936876-013

Centralized cryptocurrency exchanges require users to hand over their assets and then act as custodian, issuing what are essentially IOUs for users to trade with on the platform.

Source quote, verbatim

These centralized cryptocurrency exchanges require users to hand over their assets to the exchange, who then acts as a custodian and essentially issues IOUs for users to trade with on the platform.

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 exchanges, as distinct from decentralized exchanges

Classification

mechanismsupport: assertedfailure: exchange IOU substitution for asset ownershipfamily: custody-and-key-lossdecentralizationdefirisk-and-incentives

Verify

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