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Binance launches off-exchange custodial settlement platform

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Binance launches off-exchange custodial settlement platform

Binance launches off-exchange custodial settlement platform Mike Dalton · 4 seconds ago · 1 min read

Institutional users can “mirror” funds in custody to their exchange account.

1 min read

Updated: January 16, 2023 at 9:46 pm

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Cover art/illustration via CryptoSlate

Binance announced on Jan. 16 the launch of a settlement platform that will allow institutional users to access exchange services while storing funds off-exchange.

The new service, called Binance Mirror, will be available to institutional users who lock their assets in Binance Custody’s cold storage service.

Those users will be able to “mirror” the balance in their custodial account to their exchange account. Then, they will be able to use the mirrored funds with Binance’s various trading and investment products, including VIP Loans.

Binance has offered its custodial service since 2021. Athena Yu, VP of Binance Custody, commented on how the platform has developed since then. She said:

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We spent much of last year refining [Binance Custody’s] operations to help our clients unlock the liquidity of their assets held in our cold storage… [We] can’t wait to introduce our upcoming new features that will elevate Binance Mirror’s functionality even further.

Though Binance Mirror was not officially unveiled until today, it seems that Binance has been offering the service for some time. The company said that mirrored assets currently make up 60% of all assets on its custody platform. It also said that assets mirrored from custody to exchange accounts increased by 67% during the last quarter of 2022.

Binance did not reveal how much is stored in its custodial or mirror program. The company’s recent proof-of-reserves statement suggests that it has $69 billion of crypto holdings, though it is not clear that the statement accounts for all of its funds.

Though Binance Custody is not of use to retail users, it is of interest to institutional users who must store funds with qualified institutions according to certain security standards.

Other notable institutional custody providers include BitGo, Coinbase Custody, Bakkt, Gemini, Fidelity Digital Assets, and Nasdaq.

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Silvergate Capital announces the suspension of Series A preferred stock dividends

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Silvergate Capital announces the suspension of Series A preferred stock dividends

Silvergate Capital announces the suspension of Series A preferred stock dividends Dorian Batycka · 11 hours ago · 2 min read

The move sent Silvergate Capital (SI) share price tumbling more than 10% today

2 min read

Updated: January 27, 2023 at 8:39 pm

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Cover art/illustration via CryptoSlate

Silvergate Capital, the parent company to the crypto bank Silvergate, has announced it will be suspending Series A preferred stock dividends as it hopes to restructure following heavy loses and FUD surroundings its exposure to several now defunct crypto entities. 

The company said Jan. 27 that it was doing so to maintain liquidity on its balance sheet, all the while navigating a series of exposures to several of crypto’s most toxic entities, including FTX and Genesis. 

CEO of Silvergate Capital Alan Lane said in a statement:

In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.

Silvergate Capital Corp. is traded on the New York Stock Exchange under the ticker SI. The Silvergate bank, founded in a small California town in 1988, rose to prominence as the banker of choice for many now null crypto firms, including FTX, who had an estimated $1.2 billion worth of deposits held in the bank at the time of its collapse last November. While Genesis, the digital asset prime brokerage founded by Digital Currency Group CEO Barry Silbert, now insolvent, also had assets with the bank totaling $2.5 million, it was reported. 

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Compounding matters even further was a bank run that saw $8.1 billion worth of deposits withdrawn earlier this month in a decline of roughly 68%, forcing Silvergate to liquidate assets and lay off 40% of its staff. At the time, the company said there was a “crisis of confidence across the ecosystem.”

By the end of 2022, Silvergate said in a statement that they held more than $150 million worth of assets from customers who had filed for bankruptcy protection. 

After going public in 2019, shares of Silvergate rose to a high of $222 in November 2021, the same month, Bitcoin peaked at over $65,000 USD. Since then, Silvergate Capital shares have fallen to $12.68, more than 90% below their all-time high. 

Silvergate Capital share price as of Jan. 27 (source: Yahoo Finance)

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Ireland’s central bank leader calls for ban on crypto ads targeted at youth

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Ireland’s central bank leader calls for ban on crypto ads targeted at youth

Ireland’s central bank leader calls for ban on crypto ads targeted at youth Mike Dalton · 3 seconds ago · 1 min read

Gabriel Makhlouf says that ads aimed at young adults should be banned.

1 min read

Updated: January 26, 2023 at 1:45 am

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Cover art/illustration via CryptoSlate

The governor of Ireland’s central bank has called for legislators to ban crypto ads aimed at youth, according to a Reuters report dated Jan. 25.

Gabriel Makhlouf, Governor of the Central Bank of Ireland, said that a “reasonable number” of young adults had invested their money in cryptocurrency. He added that there is an “uncomfortable” amount of advertising targeting youth.

Makhlouf explicitly advocated for a ban before an Irish parliamentary committee, stating:

“If you could find a way, I would recommend that adverts to [the young adult] cohort are banned.”

He described most cryptocurrencies as a Ponzi scheme because other assets do not back many tokens. He then asserted that investing in cryptocurrency is “essentially gambling” and said that investment usually leads to loss.

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He also warned that upcoming EU legislation concerning stablecoins — backed by fiat currency — would not solve the issue. Reuters implied that Makhlouf was referring to MiCA regulations, which include rules for stablecoin issuers.

The Bank of Ireland and its executives have previously issued similar warnings. Makhlouf cautioned Bitcoin investors that they could lose money on their Bitcoin investments in 2021. The bank also issued another warning about crypto investment in March 2022, which included a warning about misleading cryptocurrency advertisements. The country has issued variations on these warnings that date back to at least 2018.

Despite its numerous warnings toward consumers, Ireland takes a somewhat permissive stance toward crypto companies. Gemini and Binance are among the companies that have gained regulatory approval to operate in the country in recent years.

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EU mandates banks to hold euro equivalent of crypto investments

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EU mandates banks to hold euro equivalent of crypto investments

EU mandates banks to hold euro equivalent of crypto investments Zeynep Geylan · 2 hours ago · 1 min read

The new bill was approved on Jan. 24 and will come into force January 2025.

1 min read

Updated: January 25, 2023 at 1:13 pm

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Cover art/illustration via CryptoSlate

EU lawmakers passed a law Jan. 24 that mandates banks invested in crypto to hold the euro equivalent of their crypto investments as capital, Reuters reported.

The requirement will come into force in January 2025 to give banks enough time to adjust their finances, according to Reuters. The bill was approved with the purpose of eliminating the instability within the crypto sphere.

EU Parliamentarian Markus Ferber said:

“Banks will be required to hold a euro of their own capital for every euro they hold in crypto. Such prohibitive capital requirements will help prevent instability in the crypto world from spilling over into the financial system,”

According to the Association for Financial Markets in Europe (AFME), the new bill does not have a clear definition of what a crypto asset is. Therefore, it could be applied to tokenized securities as well.

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Since all EU states have approved the bill, lawmakers will start negotiating the final text with member states to finalize the official script.

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