How Does an Exchange Manage the On-Chain Transfer Process during Settlement?
An exchange typically uses its own secure, institutional-grade hot and cold wallets to manage the transfer. Upon expiration, the exchange debits the seller's internal account and credits the buyer's internal account.
The actual on-chain transfer of the cryptocurrency to the buyer's external wallet is usually initiated by the buyer as a withdrawal, which the exchange then executes from its pool of funds, adhering to its security protocols.
