Quote from: o_e_l_e_o on Today at 07:48:23 AM

Quote from: PrimeNumber7 on Today at 07:19:49 AM

Requiring customers to withdraw their coin will lead to higher costs in the form of transaction fees, and will likely result in transaction fees increasing if the exchange is large enough.

Exchanges already make huge profits on withdrawal fees. Binance charges 50,000 sats per withdrawal when 500 sats would more than cover it, and then pockets the difference. More withdrawals would result in more profits from fees for Binance, not less. But as you say, forcing customers to keep coins on the exchange leads to more profits from trading fees.

I think it is most likely that exchanges stand to lose more in trading fees than they do in additional transaction fee revenue if they required their customers to withdraw their coin immediately after trading. I don't think transaction fee revenue is as much as a revenue center as it is a way to discourage smaller accounts.

If someone with $20,000 worth of coin is forced to immediately withdraw, if this results in this customer from making a single trade, this type of policy would be a net negative from a profit perspective.

Another negative is that this policy would effectively make it impossible for an exchange to store customer money in cold storage. Currently, if a malicious actor were to compromise the trading engine, and say for example crash the price down to $0.01, the exchange could simply reverse the trades, and take the hit for whatever was in their hot wallet. If customers had to withdraw, anyone holding USD would likely be left holding the bag.