Following the collapse of FTX and Alameda late last year, Binance, the leading cryptocurrency exchange, has been putting in place measures to restore confidence in the crypto market. Already, the Bitcoin market has significantly increased from pre-FTX levels, but regulators especially from the United States are still on Changpeng Zhao’s (CZ) business.
In a bid to reassure both institutional investors and global regulators of the reduced risks in investing in the crypto market, Binance is reportedly exploring new partnerships with traditional banks.
According to a recent report by media outlet Bloomberg, Binance will be allowing its institutional customers to keep the collateral for leveraged positions out of Binance Custody. Notably, Binance Custody is an entity that was registered in Lithuania back in 2021 to enable exchange customers to safely store their digital assets.
However, Binance is reported working with Swiss-based FlowBank and Bank Frick, which is based in Liechtenstein to facilitate the fund custody
“Our clients are a lot more conscious of managing risks,” said Catherine Chen, the head of VIP & Institutional at Binance, in an interview.
We hear from our users that they love to trade on Binance, but at the same time, they are getting ‘pressure’ from their internal risk control. For them to scale up further activities on Binance, they need to look for ways to help them diversify the on-exchange risks.
Nevertheless, the report noted that the two choices are subject to change in accordance with the regulatory scope. Furthermore, Binance is a global cryptocurrency firm that is regulated in several jurisdictions across different continents.
Reportedly, Binance’s institutional arm – a dedicated segment that caters to proprietary trading firms, hedge funds, family offices, and others – said its new clients increased by 17.4 percent during the fourth quarter from the prior quarter. As a result, the need to diversify the clients’ storage point and meet regulatory demands have increased.
Due to its high crypto listing and liquidity, Binance is often favored by new traders and also veteran investors for its reputation. Over the years of its existence, Binance has managed to keep offering the same services despite the effects of the crypto bear market. Currently, Binance crypto exchange has more than 120 million registered users who reported over $38 billion in daily traded volume.
The crypto market is on the cusp of mainstream adoption fueled by increased regulatory approvals around the world. Already, the European Union has allowed the use of digital assets through the Markets in Crypto-Assets Act (MiCA) legislative standards
Moreover, crypto exchange Binance is one of the heavily regulated crypto firms in the industry as it holds the most coins from users. According to on-chain data, Binance wallets hold a total of 549,957.92 Bitcoins, although over 37k has been withdrawn in the past 30 days.
