Institutional investors can now store their cryptocurrency in cold custody on Binance, the largest centralized cryptocurrency exchange in the world. The move aims to prevent outflows from the exchange and make it safer for traders.
In a blog post, Binance revealed that institutional investors will now be able to use Binance Custody, a Lithuanian legal entity, to post collateral for leveraged trading. Customer assets will be held offline by Binance Custody in cold storage wallets, which are made to store cryptocurrency offline and are virtually invulnerable to on-chain hacks.
According to the exchange, users will be able to access assets once trades have settled, and institutional investors will soon be able to store collateral in cold storage.
The news comes at a time when the exchange has seen a staggering $12 billion leave its platform in the past 60 days. There have been recent reports that say Binance’s BUSD stablecoin wasn’t always fully pegged to the US dollar.
Binance Sheds 3B$ In December
Changpeng Zhao, the CEO of Binance, previously mentioned that $3 billion had left the exchange in December, implying that the outflows have increased in the past month.
It is encouraging to see that the exchange is making an effort to make trading for institutional investors safer by allowing institutional investors to store their crypto in cold custody. It also demonstrates that the exchange is addressing the concerns of investors who may have been put off by the recent collapse of FTX, a crypto exchange that was ultimately destroyed by a bank run in November.
The cold custody service is offering another indication that the platform is working to improve its transparency and security, which will probably make it more appealing to institutional investors.
Although it is unclear whether their move will be sufficient to prevent withdrawals from its platform, it is evidence that the exchange is safeguarding its customers’ crypto.
