The world's ultra-rich face a challenge: they want to invest a big chunk of money in cryptocurrency, but most traditional banks aren't providing them with comprehensive support beyond a few exchange-traded funds (ETFs).

Binance’s head of VIP and Institutional, Catherine Chen, saw this as an opportunity to help through Binance Prestige — a new offering that complements Binance Wealth for high-net-worth individuals (HNWIs).

“Oftentimes, when you speak to private banks, they will say there’s no significant demand for crypto beyond an ETF,” Chen said in an interview with CoinDesk.

For her, it is a kind of “chicken and egg problem” when it comes to bridging the gap between wealthy clients and crypto, as private banks and traditional wealth managers, for the most part, are still trying to become comfortable with digital assets.

Ultra-rich family offices seeking to invest more in crypto and struggling to find proper support from traditional wealth managers have become a trend. Most recently, a survey by Swiss software firm Avaloq found that the traditional wealth sector is under mounting pressure to deliver digital assets to wealthy clients. In the UAE, for instance, 63% of ultra-rich investors have switched managers or are considering doing so, according to that survey.

Read more: Wealth Managers Scramble to Add Crypto as UAE's Ultra-Rich Demand Digital Assets

Looking back to earlier days in the sector, the preferred form of investment in crypto for many family offices was akin to venture capital, Chen said. “Some early entrant family offices did buy spot crypto, but it was a very small subset, who might allocate a bit to crypto and store that on a hardware device locked in a safe,” she said.

Fast forward to today, as awareness of crypto as an asset class has matured, Chen has witnessed an increasing number of family offices asking if they should have made a move into crypto earlier.

“If these people are asking this question, then it's likely a crypto ETF is not enough for them. This is where Binance can come in,” Chen said.

Buying in 'big chunks'

Catering to the super-rich requires a so-called white-glove approach, characterized by a heightened level of communication, hand-holding, and deference.

In practice, Binance Prestige will guide clients through the onboarding process, which includes bridging fiat currency to crypto and then facilitating their first crypto purchase, Chen said. Customers’ crypto purchases will be informed by an understanding of that client’s background, history, investment profile and risk appetite.

“When it comes to helping them acquire their first crypto, this is probably not going to be like just any other user of the Binance app,” Chen said. “They are probably going to look at acquiring a big chunk of crypto, and the expectation is this would be done via a phone call or through chat, whereby there’s this high-touch service.”

The new platform targets customers who typically qualify for an account at a private bank, specifically those with assets of around $10 million or more.

Often there will be specific instructions attached to a purchase, Chen said, such as factoring in things like volume-weighted average price, a key intraday indicator showing an asset’s average price weighted by volume, or time-weighted average price, an algorithmic strategy that divides a large order into smaller, equal-sized chunks to be executed at regular time intervals over a specified period.

And once a family office has acquired a significant amount of crypto, the likelihood is that they will want to start earning a yield on it, which is where Binance’s Earn product can be utilized, Chen said. However, the risk profile of these investors usually precludes forays into areas like decentralized finance (DeFi), she added.

But the Binance Prestige team is ready to help their clients explore more traditional types of sophisticated trading: “If there is sufficient volatility, then perhaps play that volatility. So that when the market is not hitting my target price, I collect a coupon, I collect the yield. And once it hits my target price, then I can exercise an option,” Chen said.

“There are a whole suite of sophisticated financial instruments available, and many of these well-informed and professionally run family offices will want this,” she added. “And so this is what Binance Prestige is all about: we will listen to the client, understand their needs and execute accordingly.”

Safeguarding wealth

With large investments come greater demands for risk management.

One of the biggest requests from ultra-wealthy family offices when investing in crypto is how their investments are custodied and how safe they are.

Chen said there is a range of customizable options when it comes to custody.

On the one hand, there may be users who are comfortable with Binance’s security and ISO standards and will leave their assets on the exchange, Chen said, while others prefer to use a hardware wallet or a third-party custodian.

“For a more versatile, crypto-native solution, we can introduce them to our institutional partner, which is SAFU (Secure Asset Fund for Users),” she said. “Another option for ultra-HNW and family office clients is banking triparty. This can be very useful if they already have a private banking relationship and the bank is also within our banking tri-party network.”

Tri-party network usually refers to a neutral third-party custodian.

As for what's to come next, there have been hints that traditional HNW services, such as succession planning, might be on the cards as add-ons to Binance Prestige. Chen said she was unable to discuss the roadmap of things yet to be announced, but noted more broadly that the way in which crypto can be passed on to the next generation is a theme she encounters more and more.

“A lot of people got into crypto maybe ten years ago when they were maybe in their late twenties or early thirties. They were single, entrepreneurs, pioneers. Now they are family people who have kids and have started thinking about planning things out.”

Read more: Turning ‘$11K to Half a Billion Dollars From Trading Memecoins’: Tales From a Crypto Wealth Manager