Binance » Bitcoin and Crypto Cold Storage for Institutions
Binance » Bitcoin and Crypto Cold Storage for Institutions
The mirror service is based on Binance Custody and involves mirroring Bitcoin and cryptocurrency assets in cold storage through 1:1 collateral held in a Binance account.
In the wake of the centralized cryptocurrency exchange (CEX) crisis, cryptocurrency exchange Binance is set to develop institutional trading services with cold storage capabilities.
Binance on January 16 announced Official launch of Binance Mirror, an over-the-counter settlement solution that allows institutional investors to invest and trade using cold storage.
The newly launched Mirror service is based on Binance Custody, a regulated institutional digital asset custodian (Bitcoin, cryptocurrencies) and involves mirroring cold storage assets through 1:1 collateral held on a Binance account.
Binance noted that the new solution allows for greater security, allowing traders to access the exchange’s ecosystem without having to post collateral directly on the platform:
“Their assets remain safe in separate cold wallets as long as the mirror position remains open on Binance Exchange, which can be settled at any time.”
Launched in 2021, Binance Custody is one platform security guard with its own cold storage solutions that cover assets protected against physical loss, damage, theft and insider dealing. Binance Custody in March 2022 has been obtained Cold wallet insurance in Lithuania to manage an institutional-grade digital asset storage solution. The mirror accounts for over 60% of all assets secured on Binance Custody.
“We created Binance Mirror last year and tested it with our institutional users. User feedback has been positive and we are excited to officially announce it and release it now,” a Binance spokesperson told Cointelegraph.
It remains unclear whether Binance plans to provide similar cold storage services to retail investors. Binance did not immediately respond to Cointelegraph’s request for comment.
The news comes shortly after Binance experienced a major drop in liquidity, with several billion dollars worth of Bitcoin and cryptocurrencies leaving the platform at the end of 2022.
The decrease in liquidity is widely attributed to the CEX crisis, which was fueled by the collapse of FTX, with investors trying to control their Bitcoin assets instead of holding them in cryptocurrencies on centralized platforms.
Amid the growing trend of self-regulation, Binance CEO Changpeng Zhao admitted that centralized exchanges may not be necessary after all. In November, Binance’s venture capital arm also invested in Belgian hardware wallet company Ngrave.
Helen Partz, Cointelegraph
Helen is passionate about learning about languages, cultures and the internet. He has many years of experience in international online advertising projects. In late 2017, increasingly interested in Bitcoin and cryptocurrencies, he joined Cointelegraph as an editor.
The opinions expressed here are solely those of the author and do not necessarily reflect those of Forex Quebec. Every investment and trading action involves risk, you should do your own research when making a decision.
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