2023-06-01 06:09:59
It is perhaps not exaggerating to say that the Sam Bankman-Fried FTX crash was one of the worst crashes in the history of the crypto world. He pointed out a lot of risk factors in connection with the crypto markets, especially the so-called for partner risk. In the case of a transaction, counterparty risk means the chance that one party will not fulfill its obligation and how much damage this will cause. The world’s largest crypto exchange, Binance, has now come up with an unusual solution.
Managing Binance and Partner Risk
For some select clients, it would allow clients to hold their trading deposits with a bank instead of the crypto platform. According to unconfirmed rumors, Binance is already in talks with some of its clients to use bank deposits as collateral for trading. That’s about it it would work that within the framework of a tripartite agreement, the client would lock up his money at a bank. The crypto exchange then lends stablecoins to the client in return. This could then be used by the client as collateral for trading in the spot and derivatives markets.
Meanwhile, the bank collateral could also be invested in the normal money markets. In this way, the income from this could offset the costs of borrowing the Binance crypto asset. In connection with the project, the names of two banks, Bank Frick and FlowBank, have appeared constantly, but nothing has been confirmed yet.. The names of the banks are not certain, and it is not certain that this is how the scheme will work. However, the news clearly shows the level of pressure that certain players in the crypto sector have been under in order to ensure the protection of their clients’ capital. Binance CEO Changpeng Zhao himself considered that buys a bank to make it crypto-friendly. In the end, I stopped doing this because of the large capital requirement and the many regulatory conditions and restrictions.
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