Crypto exchange Binance has started to bring upgrades to its institutional trading services using cold-custody opportunities, as reported by Cointelegraph.
According to Cointelegraph, on January 16, 2023, Binance unveiled its Binance Mirror, an off-exchange settlement solution for trading purposes of institutional investors using cold custody. It is believed that the Mirror service has been inspired from Binance Custody, a regulated institutional digital asset custodian. Furthermore, the feature concerns mirroring cold-storage assets using 1:1 collateral kept on Binance account.
“Their assets remain secure in their segregated cold wallet for as long as their Mirror position remains open on the Binance Exchange, which can be settled at any time,” Binance stated.
On the basis of information by Cointelegraph, Binance Custody was unveiled in 2021, and indemnifies secured assets against physical loss, damage, theft and internal collusion. In March, 2022, Binance Custody got cold-wallet insurance in Lithuania to handle an institutional-grade digital asset custody solution. Reportedly, Mirror comprises over 60% of all assets secured on Binance Custody.
Moreover, Cointelegraph noted that uncertainties still prevail over whether Binance intends to supply similar cold custody services to retail investors. The development happened after Binance faced a liquidity drop, with dollars worth billions of crypto leaving the platform in late 2022. Sources stated that the liquidity fall happened on account of the crisis among centralised exchanges (CEXs) fueled by the collapse of FTX. Changpeng Zhao, CEO, Binance, claimed that CEXs might not be required anymore.
(With insights from Cointelegraph)