Binance Enables Institutions to Trade Using Cold Storage Assets

  • The new product from Binance Custody will allow institutional clients to trade in the Binance ecosystem using assets from their cold-storage accounts.
  • Called Binance Mirror, the off-exchange settlement solution has already attracted the attention of institutional investors, accounting for more than 60% of all assets secured on Binance Custody.

Binance CEO Changpeng Zhao. CoinDesk

Popular cryptocurrency exchange Binance has officially launched an institutional trading service that will enable investors to trade using cold custody, the company said in a press release on 16 January.

According to the announcement, the new service — called Binance Mirror — will allow institutional investors to trade in the Binance ecosystem using assets held in cold storage by Binance Custody, a regulated institutional crypto custodian. The new solution gives investors greater security, as it involves mirroring cold-storage assets through 1:1 collateral held on a Binance account. The VP of Binance Custody, Athena Yu, said in a statement:

“Security is a top priority for institutions, who also desire the deep liquidity that the Binance Exchange offers. Binance Mirror brings the best of both worlds. We’re very excited about where we are today and can’t wait to introduce our upcoming new features that will elevate Binance Mirror’s functionality even further.”

Yu also noted that Binance spent much of last year refining the new product to help “clients unlock the liquidity of their assets held in our cold storage”, and that now assets in Binance Mirror account for more than 60% of all assets secured on Binance Custody. While the solution is a blessing to institutional investors — who will now be able to continue trading during volatile markets — it remains unknown if retail investors will have access to it in the future.

The new features comes shortly after several exchanges experiences a drop in liquidity largely fueled by the collapse of FTX, which filed for Chapter 11 bankruptcy back in November 2022. Once millions of people lost access to their crypto, investors started flocking to self-custody solutions instead of storing their digital assets on centralized platforms.

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