Binance Introduces Fund Accounts for Institutional Crypto Managers
Crypto exchange Binance has introduced Fund Accounts, a portfolio management facility commonly used in traditional finance markets, now designed specifically for digital assets. The move is made with the intention of serving institutional investors seeking efficient asset management and trading execution in the crypto space.
What Are Binance Fund Accounts?
Launched on April 24, Fund Accounts enable portfolio managers to sweep investor funds into one, or multiple omnibus accounts. The accounts are typically held in custody by a single custodian to aid in efficient trading execution and Activity Streamlining. Binance claims that the solution significantly simplifies the operational complexity of managing multiple clients through separate accounts.
It is only reachable by qualified fund managers, who are required to work with their Binance VIP representative. The fund managers, as well as their clients, are required to be KYC and KYB compliant and to have requisite licensing or regulatory relief in their regions for compliance purposes.
Bridging TradFi and Crypto
The launch is part of a larger trend of TradFi instruments coming into the crypto sector. Binance’s new product comes on the heels of recent developments throughout the industry to include institutional players, fueled by growing exposure to digital assets via instruments such as Bitcoin ETFs and onchain lending platforms.
Institutional adoption is picking up as real-world asset tokenization and decentralized finance (DeFi) interest picks up steam. Blockchain firms like Theo are in the meantime building infrastructure to make institutional-level services accessible to the masses. Theo in the same day the Binance news came out, announced a $20 million funding round led by investors of firms like JPMorgan and Citadel.
Institutional Development in the Cryptocurrency Industry
Binance, the world’s largest cryptocurrency exchange by volume, is enhancing its ecosystem to support the needs of professional customers. Fund Accounts tool goes hand-in-hand with enhancements to its VIP program supporting institutional investors and high-net-worth individuals.
As crypto and traditional finance grow more interdependent, tools like Fund Accounts will increasingly become business-as-usual for professional asset managers active in the emerging digital economy.
