Insider sources reveal that Binance is collaborating with Spanish bank BBVA to keep crypto assets off exchanges, allowing customers to store their digital assets directly with the bank instead of on the platform.
A recent Financial Times report states that Binance has appointed Spain’s third-largest bank, Banco Bilbao Vizcaya Argentaria (BBVA), as one of several trusted independent custodians, according to individuals familiar with the agreement.
Under this arrangement, traders’ funds will be held by BBVA in U.S. Treasuries, which Binance will then accept as margin for trades on its exchange.
This move is part of Binance’s proactive efforts to improve custody practices by encouraging customers to hold fewer assets directly on exchanges. One insider explained that the partnership was intended to reduce the risk of a “hypothetical FTX 2.0.”
Another motivation behind Binance’s push to work with traditional financial institutions like banks is to better serve traders who prefer to use a third party for custody and want their collateral kept in a secure location.
Previously, Binance clients could only store their assets either on the platform itself or through a custodian called Ceffu, which U.S. officials have described as a “mysterious Binance-related entity.”
In recent months, Binance has been broadening its network of partners to include banks such as Switzerland’s Sygnum and FlowBank, aiming to minimize counterparty risks.
Binance aims to avoid a repeat of ‘FTX 2.0’
The collapse of FTX was primarily caused by its failure to use third-party custody—a crucial safeguard that ensures customer assets are kept separate, independently audited, and regulated, rather than held directly on exchanges.
Instead, FTX stored customer funds on its own balance sheet, commingling them with corporate assets and allowing its sister company, Alameda Research, access to those funds. This lack of separation and oversight led to widespread misappropriation from the exchange’s early days until its bankruptcy filing.
When FTX fell in late 2022, investors were left devastated as their funds became tied up in bankruptcy proceedings. In the aftermath, more traders have increasingly chosen independent custody solutions to avoid having too much of their assets held directly by exchanges.
