Binance explores new custodial solutions, with some user assets now stored in independent Swiss banks.

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Binance Users' Assets Can Be Stored in Independent Banks Sygnum Bank, Flow Bank

According to a report from the Financial Times, concerns have been raised among some traders due to Binance paying a hefty fine in a settlement with the U.S. Department of Justice last year.

In response, Binance has allowed some large traders to store their assets in independent banks, including Swiss-based Sygnum Bank and Flow Bank.

Binance founder Zhao Changpeng agreed to resign, pleaded guilty, and Binance was fined $4.3 billion

Both banks are not traditional banks and cater to different target users:

How Did Binance Initially Handle Large User Assets?

Binance initially stored large user assets through its "official partner Ceffu."

Ceffu is a Switzerland-based cryptocurrency custody company established in 2018. Ceffu claims to have a structure independent of Binance and possesses accounts and wallet systems separate from any partnering exchanges, including Binance.

However, U.S. regulatory authorities described Ceffu as "a mysterious Binance-related entity" last year. This heightened user concerns and prompted Binance to explore third-party custody solutions.

Binance: Explored Banking Solutions Long Ago

Binance told the Financial Times that it began exploring and developing third-party banking solutions as early as two years ago.

Binance stated:

The new initiative directly addresses all institutional investors' concerns, allowing them to better manage risks and further expand trading volumes. We are also actively engaging with many interested banking partners and institutional investors.

Large institutions seem quite satisfied with this.

The head of a cryptocurrency trading firm stated that he would rather keep his money in Swiss banks than with Binance.

Another head of a large cryptocurrency hedge fund described Binance's custody solution "Ceffu" as a "necessary evil" and believes that his funds should never touch exchanges and the solution is to be completely independent of Binance.