Binance » Bitcoin and Cryptocurrency Cold Storage for Institutions

Binance » Bitcoin and Cryptocurrency Cold Storage for Institutions

The Mirror service is based on Binance Custody and includes cold storage of bitcoin and cryptocurrency assets with 1:1 collateral stored in a Binance account.

Amid the Cryptocurrency Centralized Exchange (CEX) Crisis, Cryptocurrency Exchange Binance intends to expand its institutional trading services with cold storage capabilities.

On January 16, Binance announced the official launch of Binance Mirror, an OTC 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, cryptocurrencies), and includes mirroring of cold storage assets using 1:1 collateral held in a Binance account.

Binance noted that the new solution provides greater security by allowing traders to access the exchange’s ecosystem without having to deposit collateral directly on the platform, stating:

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

Binance Custody, launched in 2021, is a custodial platform with proprietary cold storage solutions that protect assets from physical loss, damage, theft, and internal collusion. In March 2022, Binance Custody obtained cold wallet insurance in Lithuania to manage an institutional-grade digital asset custody solution. The mirror accounts for over 60% of all assets secured on Binance Custody.

“We created 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 it now,” a Binance spokesperson told Cointelegraph.

It remains unclear whether Binance plans to provide 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 sharp drop in liquidity as several billion dollars worth of bitcoin and cryptocurrencies disappeared from the platform in late 2022.

The drop in liquidity is often attributed to the CEX crisis caused by the FTX crash, with investors flocking to self-custody instead of storing their bitcoin assets in cryptocurrencies on centralized platforms.

Amid the growing trend towards self-custody, Binance CEO Changpeng Zhao acknowledged that centralized exchanges may not be needed eventually. In November, the venture arm of Binance also invested in Belgian hardware wallet company Ngrave.

Helen Partz, Cointelegraph

Helen is passionate about learning languages, cultures and the internet. He has many years of experience in international advertising projects on the Internet. In late 2017, increasingly interested in bitcoin and cryptocurrencies, 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, so you should do your own research when making a decision.

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