As reported by Bloomberg, Binance has found a way to ease concerns of institutional investors regarding their crypto assets that were raised after Binance’s ambitious rival FTX collapsed at the start of November last year.
From now on, Binance allows investors to keep the collateral for their leveraged positions off the platform. Binance Custody will help here, which stores assets in cold wallets.
Cold wallets are not connected to the Internet, Binance reminded investors, so their crypto used for backing their leveraged trades will be secure there. Once the trades are done, the coins will be unlocked and the customer will have access to them again.
Binance Custody, which was launched last year, is registered in Lithuania.
After FTX crashed and became insolvent, along with its founder Sam Bankman-Fried and his trading company Alameda Research (which pulled Binance into insolvency along with it), horrified and shocked investors began frantically withdrawing crypto from Binance and other crypto exchanges as they were afraid to see their funds misused as well. They took billions of crypto off Binance, in particular.
However, head of the exchange, CZ, calmly commented that this was regular transactions. He added that Binance saw a lot more withdrawals when LUNA token crashed.
Arman Shirinyan
Alex Dovbnya
Vladislav Sopov