The largest crypto exchange globally, Binance, has announced that it has launched the Capital Connect service to facilitate communication between its VIP clients and crypto investment fund managers. The new platform will be accessible only to Binance’s most privileged consumers, including fund and asset managers, hedge funds, broker’s liquidity providers, companies, family offices and high-net-worth individuals. Users can apply for access to Capital Connect as investors and investment managers; the platform is a free service to all existing Binance VIP clients and is subject to regional restrictions.
According to a report on the Binance website on May 10 2023, users must complete the verification process, and the exchange will not charge any fee or commission. Investors can browse various funds, diversify their portfolio allocation and select Investment Managers based on terms, redemption, commission, AUM, Sharpe ratios and strategies. Moreover, Investment Managers can raise awareness of their funds and attract new clients.
Binance service for VIP clients
The user must complete a mandatory Know-Your-Customer/ Know-Your-Business (KYC/KYB) check to participate in the program. Investors are the only ones who can send connection requests, and before approval, Investment Managers can scan through the investor’s profile. Investment Managers are required to document monthly returns verified by trusted fund administrators. Investors may use this data to reference the fund’s historical returns.
After the link has been made, Binance will not communicate between the two parties. In addition, Binance said it will not guarantee any returns on investments. In a statement, the company said, “With Capital Connect, we want to offer a free service that addresses the pain points of information disclosure and networking inefficiencies the institutional investors and fund managers face today. Capital Connect does this by helping to create information standards and reduce inefficiencies through a unified platform.”
Overview of Capital Connect
It is a free service for all existing Binance VIP clients, which allows users to apply for access as an Investor or Investment Manager. Investors will be allowed to browse various funds and diversify portfolio allocations. Capital Connect is easily accessible within the Binance Institutional navigation menu and is streamlined and cost-free for Investors and Investment Managers to connect within the exchange’s ecosystem. The platform ensures an automated and secure exchange of information, and users remain anonymous to protect user data until a connection is completed. Investors initiate connection requests, after which Investment Managers analyse the investor’s profile and determine whether to approve.
How to use Capital Connect
To use Capital Connect, one must first apply for access as an Investor or Investment Manager, and both roles are only available to Binance VIP-level users who managed to complete the verification process, according to the developers of Coin Insider.
Requirements for Investors
Investors must be Binance VIP users who have completed the KYC/KYB process with an initial minimum deposit balance of $100K. However, Binance will not be involved in the funding or matching process as the dealings between participants are separate and independent from the Binance platform.
Requirements for Investment Managers
Besides being a Binance VIP-level user, Investment Managers must pass the Know-Your-Business (KYB) verification process. Investment Managers must provide a record of their past performance, which must be verified by a reputable fund administrator to be listed.
How to get started
The first step is to head to the Capital Connect page, log into your Binance account, and pick a role between Investor and Investment Manager. Agree to the terms and conditions of the position chosen. For the Investor role, you wait for the application to be reviewed and processed within three business days, and notification of the result will be sent through email. For the Investment Managers, once you have agreed to the terms and conditions, you must submit a fund listing application first for review. Then the application will be reviewed and processed within five business days. Then the Binance VIP & Institutional Team will be in contact to confirm the listing details.
Over the past year, Binance has spent much time and money on global compliance. However, it has paid off with regulatory permits in several European countries; Binance has been facing massive pressure from the US by the SEC. The exchange has highlighted that Capital Connect is a purely introductory service presented as a basis without warranty or representation. Binance advises users to check for availability in their region and check if they qualify. Note Binance does not receive compensation for providing Capital Connect and is not liable for any losses incurred. This article is informative and should not be taken as financial advice. Investors should do further investigations on this issue as they are solely responsible for their investment decisions and liable for any loss they incur.