Following the collapse of FTX, several crypto exchanges like Binance were called upon to review their security policies. A way to limit the possibilities of such a scandal happening again. Binance seems to be working on it despite its setbacks with regulators.
Bank guarantees for active traders at Binance
Regularly criticized for the lightness of the security features of its platform, Binance is actively working to silence these critics. In any case, this is what the latest advances in the field seem to indicate.
On Tuesday, May 30, crypto company Binance announced the establishment ofa new security measure for traders. This consists in limiting the exposure of the latter to counterparty risks in terms of crypto transactions.
In other words, Binance is exploring the possibility of protecting institutional users, in particular, against the company’s potential financial difficulties. The idea behind such a policy is simple.
This is to offer traders the guarantee that their funds will not disappear. This, even in the event of Binance’s inability to honor its financial commitments. Something to reassure users in the extremely unstable context of the crypto market.
A question nevertheless emerges: how would this measure be implemented? Binance’s solution is to involve banks in the relationship that unites it with users. The idea implies that these are the banks that will receive funds from traders.
If this project comes to fruition, it means that client funds will no longer be deposited with Binance as is currently the case. At the latest news, FlowBank and Bank Frick would be the two banks targeted for the realization of the initiative.
For the time being, no information has filtered as to the signing of an agreement with the latter. We know, however, that this potential agreement would change the structure of the contract between Binance and institutional users.
Not only would this one involve three parties, but it would also offer more profits to traders. This, because their funds deposited in the bank could be invested in the money market and earn interest.
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