EmeraldX is a custodial exchange — we hold your assets and sign withdrawals on your behalf. This page explains how custody works, what protections exist, and what happens when things go wrong.
Each EmeraldX user has a primary deposit wallet. The wallet address is the only thing stored in the database — when you deposit, the incoming asset is detected from the on-chain Transfer event and credited to your internal balance. One address accepts any supported asset (native IMX, USDC, WETH, or whitelisted NFTs); cross-asset deliveries credit in the detected asset.
The database stores addresses only. Key material lives in an isolated signer (MPC / KMS / HSM) that the EmeraldX application calls to sign outbound transactions. A database compromise cannot extract user funds because the keys are not there to extract.
EmeraldX continuously reconciles the sum of all user internal balances against the on-chain reserves the platform actually holds. If the reserves ever fall short of the sum of user balances — for any asset — trading is automatically paused until the deficit is resolved. This is the single most important protection against silent balance inflation.
Live reserve observations are published on the Status page.
Standard withdrawals are authorized by an EIP-712 signature from your wallet and execute on the ledger immediately — no operator approval needed. The custody signer broadcasts the on-chain transaction. Operators are only involved in emergency scenarios: dispute resolution, fraud freezes, and manual ledger adjustments.
If the EmeraldX service is unavailable, trading is paused (you cannot submit new orders or accepts), but on-chain withdrawals remain user-authorized and the custody signer continues to broadcast pending requests. If a reserve deficit is detected (any asset, any size), trading is automatically paused; withdrawals continue.
For the operator-level incident response and the legal recovery framework, see Terms of Service.
EmeraldX is not a regulated qualified custodian in any specific jurisdiction, has not published a third-party security audit, and does not publish proof-of-reserves signatures verifiable by an independent auditor. The protections described here are technical (architectural separation of keys from data, automated reserve reconciliation, user-authorized withdrawals) — not legal guarantees. Read Terms of Service for the binding framework.