Binance » Cold Storage of Bitcoin and Cryptocurrencies for Institutions
The Mirror service is based on Binance Custody and involves cold storage mirroring of Bitcoin and cryptocurrency assets through 1:1 collateral held in a Binance account.
During the centralized cryptocurrency exchange (CEX) crisis, cryptocurrency exchange Binance is set to enhance its institutional trading services with cold storage opportunities.
On January 16 Binance announced the official launch of Binance Mirror, an over-the-counter settlement solution that allows institutional investors to invest and trade using cold storage.
The new Mirror service is based on Binance Custody, a regulated institutional custodian of digital assets (Bitcoin, cryptocurrencies) and mirrors cold storage assets via 1:1 collateral held in a Binance account.
Binance pointed out that the new solution allows for greater security, allowing traders to access the exchange ecosystem without having to post collateral directly on the platform, stating:
“Their assets remain safe in their separate cold wallet as long as their mirror position remains open on the Binance Exchange, which can be settled at any time.”
Launched in 2021, Binance Custody is a platform custodian with its own cold storage solutions, covering assets protected from physical loss, damage, theft and internal collusion. In March 2022, Binance Custody obtained cold wallet insurance in Lithuania to operate an institutional grade digital asset custody 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 happy to announce and officially release it now,” a Binance spokesperson told Cointelegraph.
It is unclear whether Binance has any plans to provide similar cold custody services to retail investors. Binance did not immediately respond to Cointelegraph’s request for comment.
The news comes shortly after Binance experienced a massive liquidity drop, with Bitcoin and cryptocurrencies worth several billion dollars leaving the platform in late 2022.
The decline in liquidity is widely attributed to the CEX crisis fueled by the FTX crash, with investors flocking to self-custody instead of holding their Bitcoin assets in cryptocurrencies in centralized platforms.
Amid the growing trend of self-custody, Binance CEO Changpeng Zhao admitted that centralized exchanges may not ultimately be needed. In November, the venture capital arm of Binance also invested in Belgian hardware wallet company Ngrave.
By Helen Partz, Cointelegraph
Helen is passionate about learning about languages, cultures and the internet. You have years of experience in international online advertising projects. Increasingly interested in Bitcoin and cryptocurrencies in late 2017, she joined Cointelegraph as an editor.
The views expressed herein are those of the author only and do not necessarily reflect the views of Forex Quebec. Every investing and trading move carries risk, you should do your research when making your decision.
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