Binance Turns to BBVA for Safer Asset Custody

Binance is reportedly working with Spain’s BBVA, the country’s third-largest bank, to offer traders the option of storing their crypto-related assets with the bank instead of keeping them directly on the exchange.

According to the Financial Times, BBVA is one of a small group of independent custodians Binance is partnering with to safeguard client funds.

How the Arrangement Works

Under the deal, traders’ funds will be stored at BBVA in U.S. Treasuries, which Binance will accept as margin for trading on its platform.

This move is part of Binance’s effort to reduce the amount of customer assets held directly on exchanges, a lesson learned from the collapse of FTX. One insider described it as a safeguard against “a hypothetical FTX 2.0.”

Why Banks Are Involved

Some traders prefer having their collateral stored by a trusted third party with strong regulatory oversight. Partnering with traditional finance institutions like BBVA allows Binance to meet those preferences while reducing counterparty risks.

Previously, Binance clients could only store assets on the exchange or through Ceffu, a custodian with close ties to the exchange that U.S. officials have called a “mysterious Binance-related entity.”

Expanding the Custody Network

Binance has been adding more banking partners in recent months, including Switzerland’s Sygnum and FlowBank. The goal is to strengthen safeguards and ensure that customers’ funds remain secure even in extreme market situations.

Learning from FTX’s Collapse

The downfall of FTX in late 2022 highlighted the dangers of not using third-party custody. FTX kept customer funds on its own books, mingling them with corporate assets and allowing access by its trading arm, Alameda Research.

When FTX collapsed, billions in customer funds were locked in bankruptcy proceedings. The incident has since pushed more traders to demand independent custody arrangements — a trend Binance appears keen to follow.