How do exchanges transfer tokens from user wallets?

Question

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I am wondering how exchanged like Binance are able to transfer out tokens from user wallets that have no ETH in them?

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For example if I create a new binance account and say I transfer ADA from say MEW to the address given to me by binance, I can see the tokens transfer on the adderss, then when I exchange those tokens on Binance they are moved from the address even though I did not transfer any ETH to that address and I do not see any ETH being sent to it before the token transaction is made.

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How does that work? Or am I missing something?

Answer 1

User’s wallet is used only when you deposit to your account. And for the security purposes; they will collect all users’ balance to a cold wallet. when user make a withdraw then exchange site will transfer from their cold wallets, not from user wallet, to user input address.

And to optimize the transaction free; they don’t always collect user wallet balance immediately. They will collect the users’ huge balance first when needed.

I think that they still need deposit some small amount before they can send your token to another address.