- Binance is exploring the possibility of letting some of its institutional clients keep their trading collateral in banks.
- The aim of the move is to reduce counterparty risk.
- Clients are jittery about crypto exchange custody after the FTX collapse.
As ripples of the FTX collapse still reverberate across the market, concerns about exchange custody remain elevated. Binance, the world’s largest exchange, is considering a plan to reduce the risk of an FTX-like collapse.
On Tuesday, May 31, Bloomberg reported that Binance was in talks with institutional clients about a potential change in collateral requirements.
Binance to Partner with Banks to Reduce Risk of FTX Happening Again
The new policy would allow institutional investors to use bank deposits as collateral for margin trading in spot and derivatives markets. To enable such an arrangement, Binance would partner with traditional banks….
