An internal withdrawal moves digital assets between accounts on the same platform. This operation involves transferring digital assets from one user account to another within the confines of a single centralized exchange or custodial service. Unlike standard blockchain transactions, these movements do not record on the public ledger, occurring off-chain within the platform’s internal database. This method offers faster processing and typically incurs no network fees.
Context
Discussions surrounding internal withdrawals often relate to platform efficiency, fee structures, and the transparency of centralized services. While convenient for users, the lack of on-chain verification for internal movements raises questions about auditability and trust in the platform’s solvency. News may highlight such withdrawals in relation to platform liquidity or operational practices.
V2 vault access control logic failed to validate message senders, enabling unauthorized internal withdrawals and a $110 million multi-chain asset drain.
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