Imagine I create a new account on lets say KuCoin. I create a ether/erc20 address and I send an amount in ERC20 tokens to that address.

KuCoin then sends that to their mainwallet. How do they do that if there is no ETH on that address.



There are a few possibilities. Either they just have ETH on that address, they have already approve'd another address (they're "sweep" account) to transfer for them, or the receiving address is a contract that they call with their authorized sweeper and the contract just transfers to their storage account.

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  • etherscan.io/tx/… Could you explain, using your three examples, these transactions? So these are ETH transactions from kucoins main wallet to a lot of other (users) addresses. All with a small amount of ether, 0.001071 ETH. But if i click on one of those addresses, you can see the transfer indeed. – EtherGosu Feb 13 '19 at 15:59
  • Well maybe the 0.001071 ETH was transferred to that account just so that kucoin could transfer the ERC20 tokens out of that account using exactly that amount of ETH for fee. – EtherGosu Feb 13 '19 at 16:01
  • That's likely what's going on. They're sending eth to the accounts to sweep the tokens, like my 1st example (but sending eth after the fact) – flygoing Feb 13 '19 at 16:04
  • But the user wallets are usually empty, like 0 ETH. So do they send exactly the ETH to that address which is then used for gas? I mean, how come the end result is alway exactly 0 ETH remaining – EtherGosu Feb 13 '19 at 16:17
  • They can know exactly how much eth it'll cost to transfer the tokens out, so yes, they send the exact amount that will be needed. – flygoing Feb 13 '19 at 16:18

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