Binance thinks about enabling dealers to keep collateral at banks: Report

Binance thinks about enabling dealers to keep collateral at banks: Report

The step takes place in the middle of growing demands of institutional dealers of digital assets after an urgently needed change after the dramatic collapse of FTX at the end of last year, which led to significant losses.

reduction of the risk of opponent

Loud anonymous sources with the matter has Binance Talks with some professional customers about a facility that would enable them to use bank deposits as security for margin trading with cash and derivatives.

The names of two potential brokers - the Flowbank based in Switzerland and the Bank Frick, based in Liechtenstein - were mentioned, but details on further consultations remained confidential. However, both financial institutions did not comment on the situation.

Bank Frick referred to banking secrecy and refused to comment. Flowbank, on the other hand, said that her license does not cover the crypto trade.

The proposed agreement is not yet final and is subject to possible changes. A variant of the proposal stipulates to block the money of the customers through a three-party agreement at the bank, while Binance is borrowing stable coins that serve as security for margin trade.

In the meantime, the cash in money market funds held at the bank could be invested in order to enable customers to interest and compensate for the cost of borrowing on the crypto exchange.

regulatory approach against Binance

Development takes place in the past few months against the background of increased official control of bony in recent months. The demise of FTX catalyzed the procedure against the investment class, whereby Binance was in the middle of a coordinated attack by the US finance authorities on crypto, including the Ministry of Justice (DOJ), the Securities and Exchange Commission (SEC) and the New York Ministerium of Financial Services (NYDFS).

Binance was also avoided by Australian banks and Fiat providers this year. The crypto exchange came into conflict with the supervisory authorities after its derivatel license was revoked by the Australian Securities and Investments Commission (ASIC) due to allegations of misleading and favoring small investors in the country.

The Australia department of Binance informed the users on May 18 about the employment of the services in Australian dollars after their domestic payment service provider Zepto has been instructed to stop support for the stock exchange. Shortly thereafter, the dealers stormed to pay off their crypto stands before the local bank stopped withdrawing. As a result, Bitcoin was traded on the platform with a significant discount.

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