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Binance Users’ Assets Can Be Stored in Independent Banks Sygnum Bank, Flow Bank
How did Binance handle users’ large assets before?
Binance: Already exploring banking solutions
Binance Users’ Assets Can Be Stored in Independent Banks Sygnum Bank, Flow Bank
According to the Financial Times, Binance’s payment of a hefty fine in its settlement with the US Department of Justice last year seems to have raised concerns among some traders.
In response, Binance has opened up the option for some 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 they serve different target users:
Sygnum Bank
Flow Bank
Year of establishment
2018
2021
Positioning
Institutional
Retail investors
Service scope
Trading, custody, derivatives trading
Trading, custody
Target customers
Institutional investors, high-net-worth individuals
Retail investors, cryptocurrency enthusiasts
Previously, Binance stored users’ large assets through its “official partner Ceffu”.
Ceffu is a cryptocurrency custody company headquartered in Switzerland, founded in 2018. Ceffu claims that its company structure is independent of Binance and has separate accounts and wallet systems from any cooperating exchange (including Binance).
However, US regulatory agencies described Ceffu as a “mysterious Binance-related entity” last year. This heightened users’ concerns and prompted Binance to explore third-party custody solutions.
Binance: Already exploring banking solutions
Binance told the Financial Times that it had started exploring and developing third-party banking solutions 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 said he would rather keep his money in a Swiss bank than on Binance.
The head of another large cryptocurrency hedge fund also 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
Further reading
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