Binance hack: A setback for crypto uptake among pension funds?

For pension schemes, the direct impact is likely limited – not least because there are almost no schemes known to invest in bitcoin or other cryptocurrencies traded on the Binance platform.

But with global institutional interest in crypto increasing, will the incident derail the investment case for this nascent asset class?

A recent global survey by EY-Parthenon of 317 investors found that almost three-quarters (73%) planned to increase their exposure to digital assets, including crypto. However, two-thirds (66%) also cited custody of digital assets as an area of increasing concern.

Crypto custody concerns key

In the UK, just one unnamed pension fund is known to have invested in bitcoin, according to its investment consultant Cartwright. The consultancy group helped the scheme invest in bitcoin as a long-term asset in November 2024.

Sam Roberts, director of investment consulting at Cartwright, said the Binance incident was a lesson about how assets are held.

“For pension schemes, custody is as important as the allocation decision,” Roberts said. “For direct bitcoin allocations, our clients use exchanges to trade, not to hold. In our view, any institutional investor holding bitcoin directly should keep it in offline cold custody, in the investor’s own name and separate from the balance sheet of whoever provides the custody.