Binance will permit institutional investors to maintain collateralized cryptocurrency used for leveraged positions outside the platform.
Binance clarified in a statement on Monday that the exchange will allow investors to post collateral with Binance Custody, which will keep the assets off the internet in cold storage wallets. Once deals have concluded, the assets will be made available to the user again.
The tool, known as Binance Mirror, might be a boon for crypto investors dealing in leveraged markets, as most crypto traders must retain their collateral on the exchange in order to trade. However, employing cold storage wallets allows users to continue trading cryptocurrency during turbulent sessions without experiencing large outflows on an exchange.
Users’ funds would also be safe against on-chain attacks, which hot wallets are prone to.