As reported by Bloomberg, Binance has found a way to allay institutional investors’ concerns about its cryptocurrency assets, which were raised after Binance’s ambitious rival FTX collapsed in early November last year.
Now, Binance allows investors to keep the security of their leveraged positions outside the platform. Binance Custody will be useful here, which store assets in cold wallets.
Cold wallets are not connected to the internet, Binance reminded investors, so the cryptocurrencies used to back their leveraged trades 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 launched last year, is registered in Lithuania.
After FTX collapsed and became insolvent, along with its founder Sam Bankman-Fried and its 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 out of fear . also to have their funds misused. In particular, they withdrew billions of crypto from Binance.
However, the head of the exchange, CZ, calmly commented that these were regular transactions. He added that Binance saw many more withdrawals as the LUNA token crashed.