Crypto Exchange Binance Attracts Institutional Investors With a New Sub-Accounts Feature

Bhushan Akolkar
By Bhushan Akolkar
Posted on Dec. 7, 2018
Crypto Exchange Binance Attracts Institutional Investors With a New Sub-Accounts Feature

Image Source: Medium

One of the world’s topmost cryptocurrency exchanges - Binance - is taking efforts to lure high-net individuals and institutional investors to the crypto space. On Thursday, November 6, Binance announced the launch of its “long-anticipated Sub-Account feature”.

Understanding the Working of Sub-Account Feature

This new feature is highly suitable for institutions as its allows them to create multiple accounts within a single organization. The Binance announcement notes that the Sub-Account feature allows parties to create up to 200 subsidiary trading accounts, under one main account. 

The “master” account gets an absolute control on the movement of the assets among the sub-accounts. Furthermore, the master account can also decide different permissions and access levels to each of these accounts. To bring a security layer, Binance’s new feature also provides each sub-account with its own API limits to allow for high-capacity trading. 

Under the new feature, Binance provides exclusive control to the master account to view and control transfer of funds between accounts, view all data and balances and get a full managerial control to a range of asset auditing tools. Moreover, the account management function also allows master account to freeze or unfreeze the sub-accounts when deemed necessary. 

However, the availability of the sub-account feature is limited only to individual and corporate users having VIP 3 tier (or above) accounts. Binance says that the  “VIP tiers will be calculated on an aggregate basis, and corresponding discounts will be applied to all sub-accounts.”

The VIP level is decided based on a 30-day trading volume and the balance of Binance Coin (BNB). Higher grade VIP level accounts have to pay lesser fees. 

On the security aspect, the exchange has strengthened the security of the sub-accounts by “sub-dividing” login information to minimize risk. 

Inflow of Institutional Capital

Last month in November, Binance announced that its laying the groundwork for more institutional capital to flow in the crypto market. The exchange said: “As blockchain technology matures and a robust ecosystem is established, we expect a larger number of institutional investors to increase their allocation into this asset class.”

While speaking to The Block, Binance CFO Wei Zhou said: "We are seeing an influx of institutional accounts in the space and anticipate institutional demand to pick up substantially in the coming months. One of our key focuses is to provide a platform that services the needs of these clients as well as our retail users."

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