Binance launches institutional crypto platform with funded trading accounts, offering digital asset managers special omnibus accounts that allow pooling of their investors’ assets.
Binance to Offer Crypto Asset Managers ‘Fund Accounts’ That Mirror TradFi Trading
The world’s largest cryptocurrency exchange is offering digital asset managers special omnibus accounts that allow pooling of their investors’ assets.
Binance is a global Binance (a) cryptocurrency exchange founded in 2017 by Changpeng Zhao.
It has quickly become one of the largest and most popular exchanges, offering over 500 trading pairs and supporting more than 150 cryptocurrencies.
Binance provides users with a secure platform for buying, selling, and trading digital assets, as well as advanced features such as margin trading and lending.
With its user-friendly interface and competitive fees, Binance has become a go-to destination for cryptocurrency enthusiasts worldwide.
A More Traditional Experience for Crypto Fund Management
Binance, the world’s largest cryptocurrency exchange, is introducing a new type of account for digital asset managers: the ‘Fund Accounts’. These accounts are designed to provide a more traditional experience for crypto fund management, with features such as universal net asset value (NAV) per unit and reduced administrative burdens.
A Binance fund account is a type of investment account offered by the cryptocurrency exchange Binance.
It allows users to invest in a diversified portfolio of cryptocurrencies and earn interest on their holdings.
Users can deposit fiat currencies or other cryptocurrencies into their fund accounts, which are then used to purchase a basket of underlying assets.
The funds are managed by Binance's team of experts, who aim to generate returns through various investment strategies.
Fund accounts typically come with fees, such as management fees and withdrawal fees.
Key Benefits for Asset Managers
Eligible asset managers can create multiple fund accounts and deploy different trading strategies tailored to each fund. This allows them to cater to a range of investors with varying risk tolerance and investment goals. The Fund Accounts also provide a clear and trackable profit-and-loss for each fund, addressing the lack of a common market standard in crypto asset management.
A Universal Market Standard for Crypto Asset Management
The introduction of the Fund Accounts aims to create a universal market standard for crypto asset management. By providing a standardized way of tracking profits and losses, Binance hopes to attract more institutional investors and asset managers to the platform. This, in turn, is expected to increase the size of assets under management (AUM) from around $1 million to $20 million.
A universal market standard refers to a set of rules and regulations that govern global trade practices.
It aims to promote transparency, accountability, and fairness in international commerce.
Key features include standardized product labeling, consistent measurement units, and clear labeling of ingredients.
The adoption of universal market standards can reduce trade barriers, improve consumer trust, and increase economic efficiency.
A Smoother Experience for Investors
For investors, trust is a key factor when it comes to investing in crypto funds. The Fund Accounts provide an established brand with clear proof of reserves and transparent NAV, which can help alleviate concerns about the security and transparency of these investments. By pooling their assets into a single account, asset managers can also reduce the administrative burden on investors.
A New Era for Crypto Asset Management
The introduction of the Fund Accounts marks a significant step forward in the development of crypto asset management. As the industry continues to mature, it is likely that we will see more traditional investment products and services emerge. With Binance at the forefront, this new era of crypto asset management has the potential to attract a wider range of investors and asset managers, driving growth and innovation in the industry.
A Growing Demand for Institutional-Friendly Infrastructure
According to Catherine Chen, Binance’s head of institutional and VIP, there is a growing demand for institutional-friendly infrastructure in the crypto space. ‘Asset management is a very mature and well-established industry in TradFi,’ she said. ‘In crypto, we think there’s a lot of demand for this particular expertise and infrastructure because, for the time being, the entry barriers and the learning curve remains relatively steep.’
A New Opportunity for Smaller Asset Managers
The Fund Accounts are also likely to attract smaller asset managers who may not have had access to institutional-friendly infrastructure in the past. As Chen estimated, the expected size of assets under management attracted to Binance Fund Accounts could range from around $1 million to $20 million. This new opportunity is likely to enable these smaller firms to bootstrap and properly scale their businesses.
A Clear Path Forward for Crypto Asset Management
The introduction of the Fund Accounts provides a clear path forward for crypto asset management. By providing a standardized way of tracking profits and losses, Binance hopes to attract more institutional investors and asset managers to the platform. As the industry continues to mature, it is likely that we will see more traditional investment products and services emerge. With Binance at the forefront, this new era of crypto asset management has the potential to drive growth and innovation in the industry.
