As reported by Bloomberg, Binance has found a way to alleviate institutional investors’concerns about their crypto-currency assets that were raised after the collapse of FTX, Binance’s ambitious rival, in early November last year.
Now, Binance allows investors to keep the collateral for their leveraged positions outside the platform. Binance Custody will be useful here, which stores assets in cold portfolios.
Cold wallets are not connected to the Internet, Binance reminded investors, so the crypto-currencies used to secure their leveraged transactions will be safe there. Once the transactions are completed, the coins will be unlocked and the customer will be able to access them again.
Binance Custody, which was launched last year, is registered in Lithuania.
After FTX collapsed and became insolvent, along with its founder Sam Bankman-Fried and his trading firm Alameda Research (which dragged Binance into insolvency with it), horrified and shocked investors began frantically withdrawing crypto from Binance and other crypto exchanges because they were afraid their funds would be misused as well. They withdrew billions of crypto from Binance, in particular.
However, the head of the exchange, CZ, calmly commented that it was regular trading. He added that Binance saw many more withdrawals when the LUNA token collapsed.