Episode 11: Around the Block with Cathy Yu of Binance Custody and Alex Ermenidis of Poloniex


Welcome to another recap of Around the Block, TRON DAO’s way of staying in touch with the community by bringing you expert opinions and conversations about blockchain topics that matter. In episode 11, host Dave Uhryniak, Director of Blockchain Strategy at TRON, talked with Alex Ermenidis, Director of Product at Poloniex, and Cathy Yu, Head of Custody at Binance Custody about the current state of exchanges and custody in crypto.

In this episode streamed on July 15, 2022, Dave began the discussion by asking Cathy about products. Cathy explained that Binance Custody’s major focus is on institutional clients. Just recently, they launched a new institutional page that will include asset management, custody, and the prime wallet that will also be launched this year. She said there would definitely be a shift in focus on the institutional parts based on the custody product they provide.

Dave pointed out that he thought it was interesting that Binance Custody got its Core Technology Certifications and he asked Cathy what that means for the company. Cathy explained this is very important for institutional clients knowing that their crypto assets are safe, securely stored, and with insurance coverage. As a custodian, Cathy said they have to make sure their technology is the best. 

Switching topics, Dave asked Alex if he sees a significant portion of your clients opting for cold storage or just leaving assets on exchange or in a hot wallet. Alex said it depends on the cryptocurrency but more than 90% of assets are in cold storage at all times. They keep a small portion in hot wallets for withdrawals and fund their liquidity needs. Alex also mentioned that Poloniex is going to be launching new staking products soon such as soft staking that Poloniex manages and hard staking being that your crypto is being directly staked. Alex added that for institutions, cold storage and custody make more sense, however, you can argue that Poloniex has been doing that for almost a decade. 

Dave then shifted gears to talk about regulation, which is a hot topic in crypto. Alex explained that he sees a lot of positive developments. People and companies are trying to figure out common ground in regulation, he believes. Ultimately, because Poloniex operates in many jurisdictions, they already have to self-regulate by doing their best to protect their consumers. 

Cathy agreed with Alex about the positive impact on the industry that regulation brings. For the retail side, it’s good to have another layer of protection for the user assets, but also the institutional clients. She said also it brings more confidence for clients to enter the industry because it’s moving in the right direction. Overall, Cathy believes regulation is helping the crypto industry to grow.

In terms of the exchange market overall and the custody market, Dave asked how Alex and Cathy see the impact of the competitive framework. At Poloniex, Alex said they’re in a good position because, at their core, they’re a cryptocurrency exchange, not a broker that takes risks. All their funds are safe and their clients are sticking with them. 

“I think that the core exchange business is here to stay,” Alex said. “There’s definitely an evolution to the decentralized exchanges and that’s what we’re exploring. We’ve partnered up closely with TRON because they have a decentralized exchange, so we’re always looking to partner there as well.”

Cathy explained that this is the time for the users to understand which exchange is a good choice. She also said this is the time for companies to keep building and growing, which is why they’re always hiring. 

“We’re happy to see and talk to real crypto companies and understand how we can help them,” Cathy said. “For institutional clients, we’re seeing a lot of them coming back to the more reputable exchange or custodian because they realize that keeping them safe and secure is number one.”

Thank you for reading this short recap of another great episode of Around the Block. We look forward to bringing you another episode with our team, bringing web3 experts together for engaging conversations.