Why does XS2 keep funds offline?
There is a long list of exchanges that have been hacked in the last few years and the main reasons is that they keep their coins and tokens in hot wallets connected to the internet. We believe that a hot wallet can never be secure enough to store customer's funds, therefore we designed a system that stores 100% of funds offline ('cold storage').
While many exchanges put some funds in cold storage, it normally arrives in a hot wallet first. All our deposits arrive directly into cold storage. Technically this is much harder, but it provides a much higher level of security for your deposits. This way we can guarantee that 100% of all customer funds are always in cold storage.
The downside of this is that withdrawals aren't instant. To maintain security we:
- Verify our database for full integrity to the last satoshi
- Verify that our database balances match the actual blockchain addresses
- Get the cold wallet from our vault
- Get multiple people to manually sign the withdrawals offline
- Send the signed withdrawals to the blockchain.
This is a manual process that requires the right people to be available. Therefore this will mostly happen during Australian business hours and is less likely on the weekend. We aim to process all withdrawals within a day or two from Customer's request.
Withdrawal Statuses
This overview shows the different statuses your withdrawal can have.
| Status | Meaning | Timeframe |
|---|---|---|
| Waiting for batch | We have received your withdrawal. It will be processed. It's waiting for us to start the manual withdrawal process. Read explanation below for more info. | About 1-2 days |
| Processing | This withdrawal has been included in a manual processing batch. | Normally < 1 hour |
| Complete | The withdrawal has been sent to the blockchain, you can get the transaction ID to track the progress on the blockchain. | Depends on blockchain, but normally within 30 minutes, often within minutes. |
| Cancelled | You have cancelled this withdrawal. | Never |
| Rejected | The withdrawal was rejected by the recipient. | Never |
| Invalid | The address/email/phone number provided is invalid. | Never |
Can you speed up withdrawals?
Yes, we agree that waiting 2 days on a withdrawal is too long. But we don't want to sacrifice our high level of security. Right now, you can send crypto from your XS2 wallets to anyone instantly via email or by giving them the withdrawal link. Once they are signed up to the XS2 exchange, they can instantly receive the tokens with no fees.
Speeding up withdrawals away from the platform
We aim to add a hot wallet in the future and load the hot wallet with company funds (not customer funds) to speed up withdrawals. This way, if the hot wallet gets hacked, all customer funds will still be 100% safe and only company funds are lost.
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