Exchange wallets are custodial wallets, meaning that the exchange service has control over the private keys associated with the wallet. Users deposit their cryptocurrencies into these wallets when they trade on the exchange, and they do not manage or control their own private keys, which can be a security risk. Exchange wallets allow for quick transactions between users on the platform and can often be integrated with trading features to simplify the buying and selling process. It is common for exchanges to implement security measures such as two-factor authentication and cold storage to secure the assets within the wallet.