In a significant development, Binance has introduced a feature allowing larger traders to secure their assets in independent banks such as Sygnum Bank and Flow Bank.
Previously, traders were limited to holding their funds either on the Binance exchange or through the custodian Ceffu, a entity labeled as a “mysterious Binance-related entity” by United States regulators.
This move by Binance is seen as a strategic effort to alleviate concerns regarding the safety of the platform. The exchange had been under scrutiny from the U.S. Department of Justice, resulting in a settlement in November of the previous year. Binance agreed to pay a substantial fine of $4.3 billion for money-laundering violations, and CEO Changpeng Zhao (CZ) resigned from his position.
Earlier, the U.S. Securities and Exchange Commission (SEC) had filed a lawsuit against Binance, accusing the platform of providing trading services with unregistered securities.
An unnamed head of a cryptocurrency trading firm lauded the recent offering, expressing a preference to “park” their funds with a Swiss bank.
Binance claims that the implementation of the “banking triparty solution” was in progress nearly two years ago, pre-dating the legal challenges from the SEC and the DOJ.
In an official statement, Binance explained, “This arrangement directly addresses the issue of counterparty risk, the primary concern for institutional investors today. Binance has initiated and successfully executed a risk management solution that addresses this concern for all institutional investors in the industry, allowing them to better manage risk and further scale their activity.”
