Binance’s New Feature Allows Institutions to Invest, Trade Using Cold Custody

image-Binance’s New Feature Allows Institutions to Invest, Trade Using Cold Custody

January 18, 2023

The new service is built on Binance Custody, a regulated institutional digital asset custodian.

Because of the FTX crisis, centralized cryptocurrency exchanges are under even more pressure, and cold wallets are now the center of attention. It is only natural for the world’s largest cryptocurrency exchange to allow institutional investors to keep their cryptocurrency in cold storage.

The “Binance Mirror” service, which Binance recently unveiled, is an off-exchange settlement option that enables institutional investors to access trading and investment products within the exchange ecosystem without directly posting collateral on it.

Binance’s New Feature

Institutions may choose to mirror a specific portion of their asset balance at a 1:1 ratio onto their exchange account by locking it in Binance Custody’s cold storage facility. The platform emphasized that user assets remained secure in their separate cold wallet “as long as their Mirror position remained open on the exchange, which can be settled at any time.”

As a result, investors will be able to trade even during tumultuous sessions without worrying about being hit by sizable outflows on an exchange.

Athena Yu, VP of Binance Custody, stated following the announcement,

“Security is a top priority for institutions, who also desire the deep liquidity that the Binance Exchange offers. Binance Mirror brings the best of both worlds. We spent much of last year refining its operations to help our clients unlock the liquidity of their assets held in our cold storage. We’re very excited about where we are today and can’t wait to introduce our upcoming new features that will elevate Binance Mirror’s functionality even further.”

Binance’s Roadmap for 2023

The dramatic collapse of Binance’s rival crypto exchange, FTX, in November last year marked turbulent times and extended crypto winter. Concerns about centralized exchanges’ ability to maintain user funds have intensified. Several crypto firms resorted to publishing proof-of-reserve reports to alleviate the fears. However, many announced layoffs while others have halted hiring.

Binance, on the other hand, plans on expanding its headcount by up to 30% this year. The CZ-led platform also scored registration to operate as a financial institution for management and trading in virtual currency from Swedish Financial Supervisory Authority. With this, Sweden became the seventh EU jurisdiction to greenlight Binance.

Read More