“We’ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets’ trading conduct. We are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.”
Binance has launched a pioneering cryptocurrency triparty arrangement for institutional investors, addressing counterparty risk concerns.
This initiative, a first in the crypto industry, mirrors traditional financial market frameworks. The solution allows institutional investors to store trading collateral off-exchange with a third-party banking partner.
This method offers a risk management strategy by enabling investors to allocate crypto assets based on their risk tolerance. Collateral can include fiat equivalents like Treasury Bills, offering the additional advantage of yielding assets.
Institutional clients can optimize their collateral and cryptocurrency investments
Catherine Chen, Head of VIP and Institutional at Binance, highlighted the year-long development of this solution, merging crypto and traditional finance expertise. “Counterparty risk has long been a concern of institutional investors across the industry. Our team, of crypto natives and traditional finance professionals, has been exploring a banking triparty agreement for more than a year to address their concern.
“We’ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets’ trading conduct. We are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.”
Binance’s arrangement offers institutional clients a way to optimize their collateral and cryptocurrency investments. The exchange is in discussions with banking partners and institutional investors to expand this service.
Binance, known for being the largest cryptocurrency exchange by volume, leads the blockchain ecosystem globally. The platform offers a diverse range of crypto products and services, including trading, education, and investment solutions.
Binance VIP & Institutional provides asset management infrastructure and advanced trading tools for institutions and private wealth clients. This banking triparty agreement marks a significant advancement in integrating traditional risk management practices into the cryptocurrency trading realm.
CZ resigned as Chairman of Binance.US
In the meantime in the United States, Changpeng ‘CZ’ Zhao has resigned from his position as chairman of the board for Binance.US, distancing himself from the governance of the American division of the cryptocurrency exchange.
The move follows Zhao’s guilty plea in a Seattle court to charges related to the Bank Secrecy Act, along with his agreement to pay a $50 million fine and his resignation as CEO of Binance.
Through a proxy agreement, Zhao has transferred his voting rights, which changes his role in Binance.US to one of purely economic interest without governance influence. This comes as a judge ordered Zhao to remain in the U.S. while awaiting sentencing scheduled for February, pending further review.
Despite the legal developments of its parent exchange, Binance.US stated that it is not involved in the recent settlements and currently has no outstanding enforcement issues with the Department of Justice, the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, or the Commodity Futures Trading Commission. The company asserts that it remains operational and dedicated to providing its customary services to customers.
