Binance Launches Off-Exchange Cold Storage Solution ‘Binance Mirror’ for Crypto Investors as Hacks Intensify

Binance, the cryptocurrency exchange firm, has announced the launch of a crypto asset storage called ‘Binance Mirror' as investors return to the sector. The global crypto market cap has shown a significant recovery in the first three weeks of 2023, going from $800 billion (roughly Rs. 65,45,524 crore) to its current valuation of $990 billion (roughly Rs. 80,97,818 crore). With ‘Binance Mirror,' which specifically caters to institutional investors, the firm will provide an off-exchange cold crypto storage solution to hefty investors, so that their fears around losing their finances to hacks or liquidity crunches could be reduced as much as possible

Binance is taking a bullish approach towards shifting the focus of its services towards cold storages of crypto assets. Cold storages or wallets are not connected on the Internet and are not reliant on the databases of exchanges.

“Through Binance Mirror, institutions lock a specified amount of their asset balance available in their Qualified Wallet, Binance Custody's cold storage solution, and mirror it onto their Binance Exchange account with a 1:1 balance. Their assets remain secure in their segregated cold wallet for as long as their Mirror position remains open on the Binance Exchange, which can be settled at any time,” the exchange said in an official statement.

Last year, the FTX crypto exchange collapsed dramatically after encountering a liquidity crunch. Other crypto firms like Celsius and Voyager also drew curtains on their businesses after being struck hard by the ongoing crypto winter.

Several hackers and scammers have also been targeting crypto exchanges to drain funds. Citing a Chainalysis report, Forbes said that last year, over $3 billion (roughly Rs. 31,076 crore) was stolen in 125 hacks. Amid these circumstances, more people have begun to move out the custody of their crypto holdings into cold storages.

In a recent report, Glassnode had noted that around 5,50,000 Bitcoins worth $9.2 billion (roughly Rs. 76,760 crore) were moved into cold storages last year.

“Security is a top priority for institutions. We spent much of last year refining its operations to help our clients unlock the liquidity of their assets held in our cold storage,” said Athena Yu, VP of Binance Custody.

Binance has been bagging operational licences in several parts of the world. Presently, it has permission to operate in seven member states of the European Union, as well as in parts of the UAE. The exchange is expecting to onboard institutional investors from all these regions