Cryptocurrency Exchange Binance Allows Large Traders to Store Assets in Other Banks
Binance, a popular cryptocurrency exchange, has made changes that now allow its users to store their assets in external banks. Previously, Binance users were required to keep their assets on the exchange or with its custodial partner, Ceffu. However, following the recent update, clients can now utilize crypto-friendly institutions like Swiss banks Sygnum or FlowBank for asset storage.
The decision to offer this option may be a response to user concerns about Binance’s regulatory disputes in the U.S., which led to a hefty fine of $4.3 billion in November. Additionally, the bankruptcy of rival exchange FTX a year earlier has further raised fears among traders. Some trading firms have expressed a preference for keeping their funds in Swiss banks rather than on Binance.
“Our banking triparty solution paves the way for greater adoption among institutional investors, as this long-standing model allows investors to manage risk while maximizing their capital efficiency by pledging collateral in the form of traditional assets.”
Binance spokesman
It’s worth noting that Ceffu was implicated in the charges brought against Binance.US by the U.S. Securities and Exchange Commission (SEC) in September 2023. The SEC stated that working with Ceffu violated previous agreements and accused Binance.US of refusing to cooperate and violating a deal to cease transferring assets abroad.
Hot Take: Binance Expands Asset Storage Options Amid Regulatory Concerns
Binance’s move to allow large traders to store their assets in external banks demonstrates its efforts to address user concerns amidst regulatory challenges. By providing an alternative storage option through crypto-friendly institutions like Swiss banks, such as Sygnum and FlowBank, Binance aims to reassure traders who may be wary of keeping their funds solely on the exchange.
These changes come in the wake of Binance’s regulatory disputes in the U.S., which resulted in a substantial fine. The bankruptcy of a competitor exchange has also contributed to traders’ anxieties. By expanding asset storage choices, Binance aims to attract institutional investors and promote greater adoption within the crypto market.
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