Benzinga - In response to growing concerns about the safety of its platform, Binance has started allowing some of its larger traders to store their assets with independent banks. This move comes in the wake of the exchange’s legal issues with U.S. authorities.
What Happened: The world’s largest cryptocurrency exchange, Binance, has begun offering its clients the option to keep their assets with independent banks, including Sygnum Bank and Flow Bank in Switzerland, reported Financial Times. Previously, Binance clients could only store their assets on the exchange or with custodian Ceffu, a “mysterious Binance-related entity,” according to U.S. regulators.
Traders’ concerns about the safety of their assets on the exchange have increased following the collapse of Binance’s rival, FTX, in 2022. This has led to a growing demand for independent custodians.
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Despite Binance’s assurance that it has been working on a banking triparty solution for almost two years, traders remain wary, especially in light of the exchange’s recent legal troubles.
Why It Matters: This development comes after a series of significant events for Binance. In 2023, Binance was fined $4.3 billion by U.S. authorities for money laundering and breaching international financial sanctions.
In October, the exchange delisted multiple trading pairs and made changes to its platform, including halting U.K. registrations and stopping direct withdrawals of U.S. dollars from Binance. These changes were followed by the collapse of FTX, which further heightened concerns about the safety of assets on cryptocurrency exchanges.
Then, in January, Binance was in the news again when it was reported that the exchange was seeking to have a fraud lawsuit filed by the SEC dismissed. This legal confrontation with the SEC has been a major point of concern for Binance and its clients, further adding to the unease around the exchange’s regulatory standing.
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