According to a Financial Times story published on Tuesday, larger dealers are now permitted by cryptocurrency exchange Binance to retain their assets in independent banks.
They were previously required to keep their assets with Ceffu, the exchange’s custodial partner, or on the exchange itself. They can now utilise cryptocurrency-friendly establishments like FlowBank and Sygnum, two Swiss banks.
The action might be a reflection of consumers’ anxiety at Binance’s regulatory struggle in the United States, which resulted in a $4.3 billion fine in November and heightened worries following competitor exchange FTX’s bankruptcy a year prior.
The head of a cryptocurrency trading company was quoted by the Financial Times as saying, “I’d much rather park my money with a Swiss bank than Binance.”
In November, Binance announced that, although it did not reveal the identities of the banks, it had been investigating a banking triparty agreement for over a year. The arrangement involved Binance, its customers, and a bank custodian.
“Our banking triparty solution paves the way for greater adoption amongst institutional investors, as this long standing model allows investors to manage risk while maximising their capital efficiency by pledging collateral in the form of traditional assets,” the exchange’s spokesperson stated in an emailed statement.