Binance Explores New Custodial Solution: Some User Assets can now be Stored in Independent Swiss Bank
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Binance User Assets Can Be Stored in Independent Banks Sygnum Bank, Flow Bank
How Did Binance Initially Handle User Large Amounts of Assets?
Binance: Has Long Explored Banking Solutions
Binance User Assets Can Be Stored in Independent Banks Sygnum Bank, Flow Bank
According to the Financial Times, Binance’s payment of a hefty fine in a settlement with the US Department of Justice last year seems to have raised concerns among some traders.
In response, Binance has allowed certain large traders to store their assets in independent banks, including Sygnum Bank in Switzerland and Flow Bank.
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These two banks are not traditional banks and have different target users:
Sygnum Bank
Flow Bank
Established
2018
2021
Positioning
Institutional
Retail investors
Service Scope
Trading, custody, derivative trading
Trading, custody
Target Customers
Institutional investors, high-net-worth individuals
Retail investors, cryptocurrency enthusiasts
Previously, Binance stored user large amounts of assets through “official partner Ceffu”.
Ceffu is a Swiss-based cryptocurrency custody company established in 2018. Ceffu claims that its company structure is independent of Binance and has separate accounts and wallet systems from any cooperating exchanges, including Binance.
However, US regulatory agencies described Ceffu as a “mysterious entity related to Binance” last year. This heightened user concerns and prompted Binance to explore third-party custody solutions.
Binance: Has Long Explored Banking Solutions
Binance told the Financial Times that it had started exploring and developing third-party banking solutions as early as two years ago.
Binance stated:
The new initiative directly addresses the concerns of all institutional investors, enabling them to better manage risks and further expand trading volumes. We are also actively engaging with numerous interested banking partners and institutional investors.
Large institutions seem quite satisfied with this.
The head of a cryptocurrency trading firm stated that he would rather keep his money in Swiss banks than Binance.
The head of another large cryptocurrency hedge fund described Binance’s custody solution “Ceffu” as a “necessary evil” and believed that his funds should never come into contact with exchanges, and the solution is to be completely independent of Binance.
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Binance
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