Binance Enables High-Volume Traders to Secure Funds in Independent Financial Institutions 

Cryptocurrency exchange Binance reportedly has permitted larger traders to maintain their assets with independent financial entities, including those open to cryptocurrency activities. Sygnum or FlowBank based in Switzerland. This move is a direct response to clients seeking the option to have their assets managed by an independent custodian. 

In the past, traders had no choice but to keep their assets either directly on the platform or through its custodial partner, Ceffu—the sole institutional custodian for Binance.  

Prominent cryptocurrency exchanges like Binance and others have broadened their market reach by functioning in various capacities simultaneously, acting as trading platforms, custodians, and lenders. This convergence of roles has raised eyebrows among regulatory bodies. In traditional finance, separate and specialized firms provide these services independently to reduce risks.  Coinbase Custodian banks focus on securely holding their clients' assets. However, this shift within the crypto sector challenges the traditional model of segregated financial roles, triggering regulatory scrutiny to ensure these integrated services maintain their integrity and security.

Last year, Binance began working on a triparty banking solution amid growing concerns about counterparty risk, which specifically involves an agreement among Binance, its users, and a banking custodian. However, the identities of the involved parties weren't disclosed.

The choice to permit users to manage their assets with independent banks may signal rising apprehensions among clients, particularly following the collapse of Binance’s rival in 2022 and the ongoing regulatory troubles facing Binance in the U.S. banks involved.

Binance Adapts to User Concerns

Last year, both the U.S. Treasury and the Justice Department imposed a historic penalty on Binance as a consequence of the exchange’s guilty plea related to money laundering and breaches of international financial regulations. FTX The U.S. Securities and Exchange Commission (SEC) has also accused Binance of 13 violations pertaining to securities laws, alleging an involvement in an extensive web of deceit and conflicts of interest. These compounded issues have heightened traders' concerns regarding the safety and regulatory status of the exchange.

seeking the dismissal of a lawsuit initiated by the regulatory body.  $4.3 billion fine In light of shifting practices and regulatory pressures, Binance has decided to allow large traders to utilize independent banks, reflecting a commitment to user demands for external custodianship and a focus on bolstering user security in the fast-paced cryptocurrency environment. 

Securities and Exchange Commission

Recently, Binance appeared before the US SEC This page's information does not constitute legal, tax, investment, financial, or similar advice. It’s crucial to only invest what you can afford to lose, and to seek independent financial counsel if you're uncertain. For additional information, we recommend reviewing the terms and conditions and the support pages provided by the issuer or advertiser. MetaversePost is dedicated to delivering precise and unbiased news, but keep in mind that market conditions can change without prior warning.

Alisa, an enthusiastic journalist at Cryptocurrencylistings, focuses on cryptocurrency, zero-knowledge proofs, investments, and the vast domain of Web3. With her sharp insight into emerging trends and technology, she offers detailed coverage that informs and engages readers in the ever-shifting world of digital finance.