The world’s largest exchange, Binance, has launched Binance Wealth, a new product exclusively for wealth managers. In an announcement on Tuesday, the exchange disclosed that the product will provide infrastructure for private wealth managers to onboard their clients directly on Binance.
According to the exchange, wealth managers must apply to use Binance Wealth. Once approved, they can register their clients by creating subaccounts and submitting the know-your-customer or know-your-business (KYC/KYB) documentation for each client. This move will allow high-net-worth individuals to have access to digital assets.
Once onboarded to Binance, each client will have full control of their subaccounts while getting recommendations from the investment advisors. The exchange noted that this new product is a technology solution, not a financial advisory service. Therefore, it provides the infrastructure for traditional wealth managers to onboard their clients to crypto.
It said:
“Binance Wealth is the first crypto exchange solution enabling wealth managers to address their high-net-worth clients’ interest for exposure to this new asset class.”
Meanwhile, the product will not be available in the US as it is currently restricted to jurisdictions where Binance.com operates. A Binance spokesperson noted that the initial rollout focuses on Asia and Latin America, and availability/use will still depend on the regulations. As part of the services under Binance Wealth, wealth managers and their clients will enjoy white glove VIP services and support from VIP account managers.
Binance wants to capitalize on institutional demand
With the moves, Binance seeks to take advantage of the rising institutional demand for crypto. The arrival of spot Bitcoin and Ethereum exchange-traded funds (ETFs) has made investors look towards digital assets to diversify their portfolios, particularly among high-net-worth individuals.
The exchange noted that the product will offer an experience similar to the traditional finance framework. However, investors will have access to more crypto assets than just Bitcoin and Ethereum. They will also be able to deploy various passive and active investment strategies.
Speaking on the development, Catherine Chen, Head of Binance VIP and Institutional, noted that it responds to the demand from wealth managers and their clients who want easier access to crypto. She noted that the product would lower the barrier of entry into crypto so that more participants would come in, increasing capital inflow.
She said:
“Unlocking capital inflow is key to making digital assets mainstream but there has long been a lack of traditional infrastructure for the private wealth segment to gain exposure to crypto.”
The exchange also observed that this new product shows its pioneering expertise and efforts toward boosting crypto adoption, particularly among institutional investors. It referenced the banking triparty solution for institutional clients as an example of its pioneering product.
Binance is losing market share
Meanwhile, Binance will hope to attract more customers through this new product as it attempts to capture an emerging market of institutional investors. This has become important given the recent decline in the exchange’s market share. Although Binance remains the biggest exchange by trading volume, its market share has been declining and reached multiyear lows in September.
According to CCData, Binance saw a decline in its trading market share across spot and derivative trading in September 2024. Spot trading volume dropped by almost 23% compared to August, leaving the exchange with only 27% of the spot trading share in September. This is its lowest level since January 2021. Derivatives volume also fell to the lowest level since September 2020, with 40.7% of the market share after a 21% fall compared to the previous month.
Binance’s struggles are likely connected to its regulatory challenges over the past two years, which are not yet over even though it has reached a $4.3 billion settlement with US regulators. The US Securities Exchange Commission recently filed an amended complaint against Binance over its token listing practice.
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