Decrypt’s Art, Fashion, and Entertainment Hub.
Binance, the world’s leading cryptocurrency exchange has launched Capital Connect, a platform that bridges institutional investors with crypto investment fund managers.
At the moment, Capital Connect is only available to Binance VIP-level users, which currently includes brokers, hedge funds, family offices and high net worth individuals among others.
The platform will allow institutional investors that are looking for exposure in the crypto market to do so in a safe and efficient manner, the company said. It will provide information on the assets under management (AUM) of different funds, their performance records, minimum investment amounts, and other important pieces of information. If interested, investors can initiate contact.
Once contacted, investment managers can review information on the institutional clients before accepting a connection. The process is automated through Capital Connect, with information kept anonymous until a connection has been agreed upon by both sides.
“Investors and fund managers continue to encounter network inefficiencies due to a lack in market standards," Catherine Chen, Head of Binance VIP and Institutional, said in a press release. She added: "With Capital Connect, we can help create information disclosure standards for market participants with different investing and fund-raising needs.”
Although Binance will enforce institutional Know-Your-Customer (KYC) and Know-Your-Business (KYB) standards to all interested parties, which must also qualify for VIP level status, the company will not be involved in discussions nor deals between investors and fund managers.
At the time of writing, over 20 funds have been listed, with Binance continuing to add more in the coming months.
A look into Binance’s institutional adoption shows that during the first quarter of 2023, the behemoth onboarded 8.3% more institutional clients than the previous quarter, while during 2022, the number of active institutional users rose by 65%, according to the exchange.
Capital Connect is the latest product offered by the crypto powerhouse, which continues to expand its reach in all sectors of the cryptocurrency industry. Through the newly created platform, Binance is paving the way to reduce information asymmetries, network inefficiencies and lack of commonplace standards at the institutional level.