Cryptocurrency exchange Binance will allow its institutional clients to keep the collateral for trading positions off the exchange, Bloomberg reports, citing Catherine Chen, Head of VIP & Institutional at Binance.
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Now, the exchange will offer big clients a new option to put the collateral at Binance Custody, a service registered in Lithuania that stores the assets in cold storage. Once the trades are settled, the assets would be unlocked and accessible to the user, the report adds.
As per Chen, Binance's clients are "a lot more conscious of managing risks." She added:
"We hear from our users that they love to trade on Binance, but at the same time they are getting 'pressure' from their internal risk control. For them to scale up further activities on Binance, they need to look for ways to help them diversify the on-exchange risks."
The decision comes a few weeks after users withdrew billions of dollars from Binance over concerns about the exchange's solvency. In mid-December, Mazars Group, a French consulting company, deleted a Proof of Reserves report for cryptocurrency exchange Binance, citing "concerns" regarding the way such sort of reports "are understood by the public."
The consulting company also stopped offering services to other crypto businesses, including KuCoin and Crypto.com. Although Mazars pointed out that proof of reserves reports are "performed in accordance with Reporting Standards," it added that these reports "do not constitute either an assurance or an audit opinion on subject matter."
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