Solution:

1. Remove the below section from the artifactory.config.latest.xml file to make sure no pairing token is cached in the artifactory.config.latest.xml

<retentionSettings>
    <retentionPolicies/>
  </retentionSettings>
  <authentication>
    <tokens/>
  </authentication>

2. Rename the file from artifactory.config.latest.xml to artifactory.config.import.xml

3. Perform a restart to the Artifactory for the changes to take effect.

4. Then, go ahead with adding the cold instance using the Rest API as explained in the following KB article.

Once the above steps are performed, you should be able to see the cold instance added in the deployment bindings section as shown below.