Binance has launched Fund Accounts, described as a “first-of-its-kind” solution on its digital asset exchange that enables fund managers to pool investor capital into omnibus accounts and streamline trading operations, according to an announcement.
Fund Accounts mirror traditional finance account structures, allowing managers to consolidate externally raised funds into one or more omnibus accounts based on trading strategies, the company said.
Previously, fund managers on crypto exchanges had to manage each investor’s assets in separate, segregated accounts, limiting scale and operational efficiency.
The new infrastructure introduces a universal net asset value (NAV) per unit framework, bringing a common profit-and-loss standard to crypto asset management.
NAV per unit calculations will track returns for each fund and ensure investors can only redeem the assets to which they are entitled, enhancing transparency and aligning with established TradFi practices.
Under the Fund Accounts model, fund managers retain full trading authority over pooled assets, while deposits and withdrawals remain restricted to individual investors.
This separation aims to bolster investor confidence by safeguarding asset custody on Binance’s platform and addressing counterparty risk concerns that have historically hindered emerging crypto fund managers.
A separate subscription and redemption agreement between managers and investors underpins the Fund Accounts structure, replicating the clarity of traditional fund management.
By reducing the complexity of multiple account setups, the solution is designed to enable managers to focus on strategy execution and efficient capital deployment.
Key advantages cited by Binance include streamlined portfolio management through omnibus accounts, the flexibility to deploy multiple strategies within a centralized framework, and the ability to attract diverse investor profiles based on tailored risk appetites.
Fund Accounts also aim to support exponential business growth by eliminating incremental operational costs associated with scaling multiple segregated accounts.
Binance said Fund Accounts complement its suite of institutional products, which already includes banking triparty arrangements to mitigate counterparty risk and Binance Wealth services for high-net-worth clients.
The new solution underscores Binance’s push to bridge the gap between crypto and traditional finance for institutional users.