{"id":51707,"date":"2023-11-30T18:37:30","date_gmt":"2023-11-30T18:37:30","guid":{"rendered":"https:\/\/prosfunds.com\/markets\/crypto\/binance-rolls-out-third-party-banking-agreement-to-reduce-counterparty-risk\/"},"modified":"2023-11-30T18:37:31","modified_gmt":"2023-11-30T18:37:31","slug":"binance-rolls-out-third-party-banking-agreement-to-reduce-counterparty-risk","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=51707","title":{"rendered":"Binance Rolls Out Third-Party Banking Agreement to Reduce Counterparty Risk"},"content":{"rendered":"<div>\n<p>Binance has announced the world\u2019s first cryptocurrency triparty arrangement with a third-party banking partner, according to a press release put out by the crypto exchange Wednesday.<\/p>\n<h2>Off-exchange collateral<\/h2>\n<p><span class=\"replacer\"><\/span><br \/>The agreement gives customers the option of keeping their collateral off-exchange with a third-party banking partner.<\/p>\n<p>\u201cCounterparty risk has long been a concern of institutional investors across the industry,\u201d said Catherine Chen, head of VIP and institutional banking at Binance. \u201cOur team of crypto natives and traditional finance professionals has been exploring a banking triparty agreement for more than a year to address their concern.\u201d\u00a0<\/p>\n<p>According to the press release, collateral held by the banking partner will take the form of a fiat equivalent, like Treasury Bills, which the company notes \u201chas the added benefit of being a yielding asset.\u201d<\/p>\n<p>\u201cWe\u2019ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets\u2019 trading conduct,\u201d Chen continued. \u201cWe are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.\u201d<\/p>\n<p>Calling counterparty risk \u201cthe primary concern for institutional investors today,\u201d the new agreement allows investors to \u201cproportion their crypto-asset allocation based on their risk tolerance.\u201d The release claims the triparty arrangement frameworks often found in \u201ctraditional financial markets.\u201d<\/p>\n<h2>Discussions of an emerging regulatory framework<\/h2>\n<p><span class=\"replacer\"><\/span><br \/>News of Binance\u2019s landmark agreement comes amidst broader discussions in the crypto industry about implementing a more robust regulatory framework.<\/p>\n<p>In early November, FTX founder, Sam Bankman-Fried, was found guilty on seven fraud-related charges for stealing and commingling customer funds, leaving an $8 billion hole in its wake.<\/p>\n<p>John Jay Ray III, an attorney specializing in recovering funds from troubled companies, is responsible for overseeing the FTX bankruptcy estate.<\/p>\n<p>\u201cNever in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,\u201d wrote Ray in a 2022 court filing.<\/p>\n<h2>Binance\u2019s transition<\/h2>\n<p><span class=\"replacer\"><\/span><br \/>The new Binance agreement follows the resignation of former CEO and founder, Changpeng \u201cCZ\u201d Zhao, after he pleaded guilty to violating numerous federal statutes.\u00a0<\/p>\n<p>\u201cI made mistakes, and I must take responsibility,\u201d Zhao wrote in an announcement posted on X as he announced his resignation. \u201cThis is best for our community, for Binance, and for myself.\u201d<\/p>\n<p>Richard Teng, former Head of Regional Markets for Binance, has taken over Zhao\u2019s role as CEO.<\/p>\n<p>\u201c\u200b\u200bHe will ensure Binance delivers on our next phase of security, transparency, compliance, and growth,\u201d wrote Zhao.<\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/binance-rolls-out-third-party-banking-agreement-to-reduce-counterparty-risk.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Binance has announced the world\u2019s first cryptocurrency triparty arrangement with a third-party banking partner, according to a press release put out by the crypto exchange Wednesday. Off-exchange collateral The agreement gives customers the option of keeping their collateral off-exchange with a third-party banking partner. \u201cCounterparty risk has long been a concern of institutional investors across [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":50816,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[35],"tags":[],"class_list":{"0":"post-51707","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-crypto"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Binance Rolls Out Third-Party Banking Agreement to Reduce Counterparty Risk | Prosfunds<\/title>\n<meta name=\"description\" content=\"Binance has announced the world\u2019s first cryptocurrency triparty arrangement with a third-party banking partner, 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