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Guide: How to Safely Deposit and Withdraw Crypto Using Tag / Memo?

Written by

Zuzanna Krychowiak

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Here is a complete, accessible compendium of knowledge about Tags and Memos in the world of cryptocurrencies. Understanding this mechanism is crucial to ensuring your funds never get stuck in the “vacuum” of the blockchain.

1. What is a Tag / Memo?

A Tag (known as a Destination Tag on the XRP network) or a Memo (referred to as Memo text or Memo ID on networks like XLM, ATOM, and EOS) is an additional string of numbers or text that typically needs to be entered alongside the standard wallet address when sending certain cryptocurrencies. 

The Best Analogy: A Skyscraper and an Apartment Number Imagine sending a traditional letter to someone living in a massive skyscraper:

  • The wallet address is the address of the entire building (e.g., 10 Cryptocurrency Street).
  • The Tag / Memo is the apartment number in that building (e.g., Apt. 45).
  • If you only write the building’s address (the wallet address) on the envelope, the mail carrier will deliver the package to the skyscraper’s front desk.
  • However, the receptionist will not know which of the thousands of residents the letter is for and will place it in the lost and found storage.
  • Exactly the same thing happens to your cryptocurrencies on an exchange if you forget the Tag/Memo.

2. Why do exchanges require this?

You might ask why there are no Tags for Bitcoin or Ethereum. Networks like XRP (Ripple) or XLM (Stellar) require users to hold a minimum reserve balance – you must freeze a certain number of XRP tokens just to activate a new, separate address on the blockchain.

If an exchange (e.g., Binance, Kanga, Kraken) wanted to set up a unique, separate blockchain address for each of its millions of users, it would have to freeze millions of dollars in tokens. The exchanges’ solution is to set up a single, massive shared wallet for a given cryptocurrency, meaning one XRP address for all exchange clients. In order for the exchange system to know which specific user’s balance to credit with the incoming transfer, it assigns each client a unique identification number—which is precisely the Destination Tag or Memo.

3. Where to get and where to find a Tag / Memo?

The Tag or Memo is always generated by the payment recipient, which is the platform where you are depositing the funds. If you are transferring cryptocurrency from a private wallet to an exchange or between two exchanges, follow these steps:

  1. Go to the destination exchange (the recipient) and open the Deposit section.
  2. Select the cryptocurrency (e.g., XRP).
  3. The system will display a pop-up warning you that a Tag is required.
  4. You will see two codes to copy: the Address and the Tag / Memo (usually 6-9 digits).
  5. You must paste both of these parameters on the platform from which you are sending the funds, in the Withdraw section.

4. Do you ALWAYS need to Enter a Tag / Memo? (The Golden Rule)

No, not always, because it entirely depends on where you are sending the funds.

THE GOLDEN RULE OF TRANSFERS:

  • Sending TO AN EXCHANGE / institution: The Tag/Memo is absolutely mandatory. The exchange uses a shared wallet, and without it, your funds will be misplaced.
  • Sending TO A PRIVATE WALLET (e.g., Ledger, Trezor, Trust Wallet, MetaMask): The Tag/Memo is unnecessary. Your private wallet has its own unique address on the blockchain, and you hold its keys, so the funds will go directly to you. When sending to such a wallet, you can check the “No Memo/Tag” option or type anything there, such as the number.

5. Network overview – how is it named across different cryptos?

Depending on the chosen blockchain, this feature goes by a different name and takes a different form:

  • XRP (Ripple): Official name is Destination Tag. The format consists of digits only (e.g., 105432). Required by exchanges.
  • XLM (Stellar): Official name is Memo (Memo ID / Memo Text). The format allows digits or text (e.g., Kanga2026). Required by exchanges.
  • ATOM (Cosmos): Official name is Memo. The format consists of digits or text. Required by exchanges.
  • TON (The Open Network): The official name is Comment / Memo. The format contains numbers and letters. Some exchanges require it to be provided.
  • EOS/WAX: Official name is Memo. The format is usually text and digits. Required by exchanges.

6. What happens if I forget to enter the Tag / Memo?

The funds are not permanently lost on the blockchain, but they end up in a “bottomless pit” at the exchange. The transaction on the blockchain will be completed successfully—the tokens will leave your wallet and physically arrive at the exchange’s main address. However, the exchange’s automated system will not credit them to your account because it lacked instructions (the Tag) on whose money it actually is.

7. How to recover the funds?

  1. You must write to the customer support of the receiving exchange.
  2. You will need to provide the TXID / Transaction Hash, which is proof from the blockchain that you sent those funds.
  3. Exchanges very often verify your identity by asking you to send, for example, a video recording of the screen of the wallet used to make the transfer.
  4. Recovering funds through the exchange’s technical department can take anywhere from a few days to several weeks. Some exchanges charge a processing fee for this operation.