Crypto exchange giant Binance is charting a new course in response to heightened concerns over counterparty risk. The exchange is embracing the stability and security of Swiss banking institutions, a move that caters to the demands of its more prominent traders.

This may be a step in the right direction for Binance, which has been restructuring and adapting to global crypto regulations.

This pivot allows select traders the option to entrust their assets with renowned Swiss banks, such as Sygnum Bank and Flow Bank. This departs from the previous arrangement where Binance limited clients to storing assets directly on the exchange or with Ceffu, its exclusive institutional custody partner.

According to a recent FT report, one crypto hedge fund manager said they felt better about using a regulated institution:

Id much rather park my money with a Swiss bank than Binance.

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The inclusion of independent banks in the custodial process is a direct response to traders preferences for more regulated and secure banking options. This is especially true following the 2022 collapse of FTX, which lost $9 billion in funds.

Binance itself is on thin ice after a massive $2.7 billion dollar fine from the CFTC for derivatives trading violations. The exchanges former CEO, Changpeng CZ Zhao, is still embroiled in a battle with regulators. The court is set to carry out his sentencing in February.

Sygnum Bank, one of Binances counterparty custodians, recently had a successful funding round, amassing $40 million. This financial infusion is set to bolster Sygnums expansion and innovation, offering sophisticated, regulated products and services.

A press release provided additional details on the usage of the funds:

Proceeds from this financing round will be used to expand Sygnums geographic reach into new markets and accelerate the development of Sygnums fully regulated products such as its B2B (bank-to-bank) platform, which now powers the crypto offering of over 15 banks and financial institutions globally.

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The banks growth and focus on secure crypto solutions also align with the markets direction towards more regulated trading ecosystems.

Binances strategy and Sygnum Banks growth mirror the crypto sectors trend towards more regulation, institutional involvement, and security. All in all, these developments signal a maturing market that prioritizes customer protection, compliance, and stability.

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCryptos editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

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Binance Touts Swiss Banks to Expand & Enhance Custody Security - BeInCrypto