Binance plans to involve more institutions in the bitcoin rally

Binance plans to involve more institutions in the bitcoin rally

With investors still wary of brokers after FTX’s bankruptcy left its clients billions of dollars in losses, other firms are looking for solutions to regain the trust of major investors.

After a rush to check its funds, Binance now has a new strategy that could attract more institutional investors.

Speaking to Bloomberg, Catherine Chen revealed more details about this new feature. According to Binance’s VIP & Institutional director, the plans include another service offered by the broker called Binance Custody.

Institutional investors can keep their money in cold wallets

Since one of the biggest concerns of investors is the security of the exchange being used, Binance has a plan to improve this problem.

In short, institutional investors can use the service Binance custody to keep your funds in cold wallets while trading on Binance.

Therefore, such funds will be more secure against hacks as such wallets have no exposure to the internet. That is, hackers cannot access it, even with the best techniques.

For Catherine Chen, director of VIP & Institutional at Binance, this is a demand from the customers themselves, upset after the FTX crash.

“Our customers are much more aware of risk management.”

“We hear from our users that they love trading on Binance, but at the same time they get ‘pressured’ from their built-in risk controls”Catherine Chen told Bloomberg. “To scale up on Binance, they need to find ways to help them diversify their risk on the exchange.”

Therefore, the new source could bring even more money, volume and liquidity to the industry. In other words, we can expect this to help Bitcoin and other cryptocurrencies maintain the good pace they are experiencing at the beginning of this year.

Binance already uses cold wallets, what’s the difference?

The use of cold wallets by exchanges was a security standard in the market before Binance even existed.

In summary, brokers leave a large portion of users’ funds in such wallets with no internet access and only a small portion in hot wallets to process daily withdrawals. Thus, the money of ordinary users is already safe by this technique.

Everything therefore indicates that the main difference in the possible new Binance feature is related to the segregation of funds. That is, if Binance experiences a security incident, these institutional investors may not be affected in any way.

Finally, wait for the service to launch for more information. Either way, FTX’s failure seems to help the industry mature, tired of suffering grotesque mistakes.

Source: Live Coins