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Binance on Monday thrown out an off-exchange settlement solution that will allow institutional investors to keep their collateral used for leveraged positions off their platform, in a move to alleviate growing concerns about the safety of cryptocurrency assets exchanges
Using Binance Mirror, institutions can post collateral through Binance Custody’s cold storage wallet solution. The assets will be accessible to the user once the trades are settled.
Most crypto investors keep their collateral on the exchange for trading, which could be at risk during market volatility that leads to large outflows on a platform. Cold storage wallets eliminate that risk.
“This is an exercise to build trust among institutions that their funds will remain safe,” said Markus Thielen, head of research at cryptographic services firm Matrixport. CoinDesk.
The major crypto exchange reportedly saw it lose nearly a quarter of its assets in the two months after rival FTX (FTT-USD) collapsed.
The company said that the adoption and use cases of Binance Mirror grew in the last quarter of 2022. Assets on Binance Mirror account for more than 60% of the total assets secured in Binance Custody.
Previously, Binance’s cryptocurrency trading volume dominated in 2022, ending the year with a 66.7% market share.
