Binance Adapting to New Methods for Asset Custody and Recovery of Market Share

By: Isha Das

Binance, a leading cryptocurrency platform, has introduced a new security feature for institutional investors to manage their trading collateral securely via a third-party partner, addressing the issue of counterparty risk. This solution, a 'banking triparty' arrangement, enables investors to maintain their collateral in traditional assets, with the banking partner undisclosed at this time.

In response to concerns around counterparty exposure, the platform had piloted this scheme in November, allowing collateral managed by the banking partner to take the form of fiat equivalents such as Treasury Bills. Prior to this, Binance clients held their assets on the exchange itself or used its custodial service provider, Ceffu. Concerns around these practices led to legal disputes with entities like the U.S. Securities and Exchange Commission.

Binance's market share is observed to be on an incline after a prolonged period of regulatory struggles last year, which necessitated the platform's withdrawal from jurisdictions like Canada and several European nations, and resulted in a $4.3 billion settlement with U.S. authorities. Despite these challenges, Kaiko Research confirms its current market share has risen to 49.44%, a significant increase from its multiple-year low of 44.5% at the end of last year.

Richard Teng, CEO of Binance, remained positive about the resurgence with a brief post on social media platforms expressing the company's sentiment of continuing to build and adapt.