The new service is built on Binance Custody, a licenced institutional digital asset custodian.
The FTX issue has increased the pressure on centralised crypto exchanges, and cold wallets are now the main emphasis. It is only logical for the world’s largest cryptocurrency exchange to allow institutional investors to retain their cryptocurrency in cold storage.
Binance has launched a new service called ‘Binance Mirror,’ which is an off-exchange settlement solution that allows institutional investors to access trading and investment products within the exchange ecosystem without physically posting collateral on it.
According to the official press release, institutions can lock a particular amount of their asset balance in Binance Custody’s cold storage facility and mirror it with a 1:1 balance onto their exchange account. According to the company, user assets are safe in their segregated cold wallet “as long as their Mirror position remains open on the exchange, which can be settled at any time.”
The move essentially allows investors to trade even during tumultuous sessions without being affected by big outflows on an exchange.
Following the release, Athena Yu, VP of Binance Custody, said, “Security is a primary priority for institutions, who also demand the deep liquidity that the Binance Exchange delivers. Binance Mirror combines the greatest features of both worlds. We spent most of last year improving its operations in order to assist our clients in unlocking the liquidity of their assets stored in our cold storage. We’re quite happy about where we’re at right now and can’t wait to unveil our planned new features that will enhance Binance Mirror’s functionality even more.”
The abrupt demise of Binance’s rival cryptocurrency exchange, FTX, in November of last year signalled stormy times and an extended crypto winter. Concerns regarding the ability of centralised exchanges to keep customer funds have grown. To assuage investors’ concerns, several cryptocurrency companies published proof-of-reserve reports. However, many companies have declared layoffs, while others have ceased hiring.
Binance, on the other hand, intends to increase its workforce by up to 30% this year. The CZ-led platform also received Swedish Financial Supervisory Authority approval to operate as a financial institution for virtual currency administration and trading. Sweden is becoming the seventh EU country to approve Binance.
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