Cryptocurrency exchange Binance has made a significant policy change and now allows larger investors to store their assets in independent banks, according to a report published today by the Financial Times.
Binance Allows Large Investors to Store Their Assets in Independent Banks
Previously, these investors had to hold their assets either on the exchange itself or on its custody partner Ceffu. The new policy allows Swiss banks to use crypto-friendly institutions such as Sygnum or FlowBank.
The move could be a response to users' concerns about Binance's regulatory issues in the US, which resulted in a hefty $4.3 billion fine for the exchange in November. These concerns were compounded by the collapse of rival exchange FTX a year ago.
The head of a crypto trading firm quoted by the Financial Times stated that he prefers to keep his money in a Swiss bank rather than Binance.
Binance announced nearly two years ago that it was exploring a banking three-party arrangement. This arrangement would involve its customers and a bank custodian. However, the exchange refused to comment on the names of the banks involved.
“Counterparty risk is not specific to Binance but is an industry concern,” the exchange added, highlighting the broader implications of this issue in the crypto industry.
*This is not investment advice.