Binance » Bitcoin and Crypto Cold Storage for Institutions

Binance » Bitcoin and Crypto Cold Storage for Institutions

The Mirror service is based on Binance Custody and includes cold storage mirroring of Bitcoin and cryptocurrency assets through 1:1 collateral held in a Binance account.

Amidst the centralized cryptocurrency exchange (CEX) crisis, cryptocurrency exchange Binance is set to upgrade its institutional trading services with cold storage capabilities.

On January 16, Binance announced official launch of Binance Mirror, an off-exchange settlement solution that allows institutional investors to invest and trade using cold storage.

The newly launched Mirror service is based on Binance Custody, a regulated institutional custodian of digital assets (Bitcoin, cryptocurrency) and involves mirroring cold storage assets through 1:1 collateral held in a Binance account.

Binance highlighted that the new solution allows for more security, allowing traders to enter the exchange’s ecosystem without having to post collateral directly to the platform, saying:

“Their assets remain safe in their separate cold wallet as long as their mirror position remains open on Binance Exchange, which can be redeemed at any time.”

Launched in 2021, Binance Custody is a platform custodian with its own cold storage solutions, covering insured assets against physical loss, damage, theft and insider dealing. In March 2022, Binance Custody GAIN cold wallet provision in Lithuania to operate an institutional-grade digital asset storage solution. The mirror accounts for over 60% of all assets held in Binance Custody.

“We built Binance Mirror last year and tested it with our institutional users. User feedback has been positive and we are happy to officially announce and release them now,” a Binance spokesperson told Cointelegraph.

It remains unclear whether Binance plans to offer similar cold storage services to retail investors. Binance did not immediately respond to Cointelegraph’s request for comment.

The news comes shortly after Binance experienced a massive drop in liquidity, with several billion dollars worth of Bitcoin and cryptocurrencies leaving the platform at the end of 2022.

The drop in liquidity is widely attributed to the CEX crisis fueled by the FTX collapse, with investors flocking to self-custody instead of storing their Bitcoin assets in cryptocurrencies on centralized platforms.

Amidst the growing trend of self-hedging, Binance CEO Changpeng Zhao admitted that centralized exchanges may not be needed after all. In November, Binance’s venture capital arm also invested in Belgian hardware wallet company Ngrave.

By Helen Partz, Cointelegraph

Helen is passionate about learning languages, cultures and the internet. She has years of experience in international online advertising projects. Increasingly interested in Bitcoin and cryptocurrencies in late 2017, she joined Cointelegraph as an editor.

The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, you should do your research when making a decision.

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