The global cryptocurrency trading market is continuously improving its regulatory framework. Exchanges are committed to upholding compliance standards set by the Financial Action Task Force (FATF) and local regulatory authorities. A key recommendation emphasizes the need to reassess crypto asset transfers, particularly those involving self-custody wallets.
To meet these requirements and comply with the Travel Rule, many platforms have introduced the Satoshi Test—a robust method for verifying control over private wallet addresses. This article explains what the Satoshi Test is, how to complete it, and important considerations for users.
What Is the Satoshi Test?
The Satoshi Test is a verification process designed to confirm that you actually control the withdrawal address you intend to use. It requires you to send a randomly specified amount of cryptocurrency (usually valued between 1 and 10 USDT) to a designated target address within a 90-minute time window.
This test is crucial for regulatory compliance and security. On most platforms, the following standards must be met for a successful test:
- The deposit must originate from the exact address being verified.
- The deposit must be sent to the verification address provided by the exchange.
- The deposit amount must match the specified test amount exactly.
- The transaction must be completed within the given time limit.
Note: If your Satoshi Test transfer fails to meet any of these criteria, the transferred amount may be locked. You can usually unlock it by providing sender information.
Advantages and Limitations:
Pros:
- It is a reliable method for confirming address ownership.
- It is supported on most blockchain networks (though not on BTC Lightning).
Cons:
- Multiple criteria must be met for the test to succeed.
- You are responsible for paying the network transaction fees.
How to Complete the Satoshi Test
Step 1: Initiate the Process
During the withdrawal process, you may encounter a prompt asking you to specify where the funds are being sent. If you select "Private Wallet," the verification method may be either "Signature Verification" or "Satoshi Test," depending on the network.
- Signature Verification: This method is fee-free and encouraged, but not all networks support it.
- Satoshi Test: If this option is selected, click "Next" to proceed.
Step 2: Begin the Verification
Pay close attention to the time limit. Once you select "Start Verification," a countdown timer will begin. The time constraint will be clearly stated on the instructions page.
Step 3: Make the Deposit
Select the token corresponding to your withdrawal network. You will be taken to a details page showing:
- The sending address (your private wallet address).
- The receiving address (your exchange deposit address).
- The exact amount to deposit (excluding network fees).
After completing the transfer, select the "I have completed the deposit" option.
Note: Network fees are not included in the deposit amount. You must add sufficient fees to ensure the full test amount arrives.
Step 4: Provide Owner Details
After confirming the deposit, you will need to enter details about the address owner, such as:
- Country of residence.
- First and last name.
Step 5: Check Verification Status
Once you submit the owner information, the status of your Satoshi Test will be displayed:
- If successful, you can proceed with your withdrawal.
- If still pending, you may continue, but the withdrawal will be locked until verification is complete.
You can check your withdrawal status on the "Asset Overview" page.
Step 6: Finalize the Process
A successfully verified address is typically valid for six months. This simplifies future transactions, as no additional verification is needed during this period.
If your withdrawal is locked pending verification, rest assured that funds will be processed and sent on-chain once the test is successful. There should be no unnecessary delays after confirmation.
If the test times out, you can usually retry. Note that network fees from previous attempts are non-refundable.
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Frequently Asked Questions
What happens if my Satoshi Test fails?
If the test fails, the transferred amount may be temporarily locked. You can unlock it by providing additional sender details or by retrying the test.
Are there alternatives to the Satoshi Test?
Yes, some platforms offer signature verification, which is free and instant but not supported on all blockchains.
How long does address verification last?
Once verified, an address typically remains approved for six months, after which re-verification may be required.
Who pays the transaction fees for the test?
You are responsible for all network fees associated with the Satoshi Test deposit.
Can I use the same address for multiple verifications?
Yes, once verified, the address can be used repeatedly within the validity period.
What currencies are supported for the test?
Most major cryptocurrencies are supported, though the test amount is usually specified in USDT or a similar stablecoin.