Binance Partners with BBVA to Offer Independent Crypto Custody and Prevent 'FTX 2.0'

Binance is partnering with Spanish bank BBVA to store crypto assets off exchanges, allowing customers to store digital assets in the bank instead of the platform. This move is aimed at preventing a hypothetical "FTX 2.0" by mitigating counterparty risks and ensuring that custody arrangements are made so that customers hold less of their assets on exchanges.

Binance, one of the world's largest cryptocurrency exchanges, has partnered with Spanish bank BBVA to offer off-exchange asset custody. This strategic move aims to mitigate counterparty risks and ensure that customer assets are not trapped on the exchange, as was the case with the 2022 collapse of FTX [1].

Under the agreement, client funds will be held in U.S. Treasuries by BBVA, which will then accept these as trading margin on Binance’s platform. This arrangement significantly reduces the risk of assets being trapped, a scenario that led to the downfall of FTX. The partnership marks a broader trend of traditional financial institutions entering the crypto space, driven by clearer regulations in both the U.S. and the European Union [1].

BBVA’s involvement adds to a growing list of independent custodians working with Binance, reflecting the exchange’s efforts to reassure users and strengthen its compliance framework. Prior to this partnership, Binance primarily held client assets on its own platform or with Ceffu, a custodian criticized by U.S. authorities for its close ties to the exchange [1]. The new structure provides an additional layer of security and transparency.

BBVA itself has been expanding its crypto services, including the launch of Bitcoin and Ether trading and custody via its mobile app for Spanish customers. The bank has also advised its private banking clients to consider allocating up to 7% of their portfolios to cryptocurrencies, reflecting broader institutional interest in the asset class [1].

The partnership comes at a time of heightened regulatory clarity and growing institutional interest in crypto. The Trump administration’s pro-crypto stance has fueled optimism, with record Bitcoin prices and increased trading volumes reported in recent months. This has encouraged banks and other traditional financial players to deepen their engagement with digital assets [1].

Binance continues to face legal challenges, including a $1.76 billion clawback lawsuit brought by the FTX bankruptcy trust. Binance co-founder and former CEO Changpeng Zhao (CZ) recently filed a motion to dismiss the case, arguing that the Delaware court lacks jurisdiction over him and that the allegations are legally unsupported [1].

The BBVA partnership is part of Binance’s broader strategy to strengthen its compliance framework and regain investor confidence. With the crypto industry still recovering from past crises, such collaborations are seen as critical in establishing trust and ensuring long-term stability.

References:
[1] Cryptonews — [Binance Partners with Spanish Bank BBVA to Offer Off-Exchange Asset Custody](https://cryptonews.com/news/binance-partners-with-spanish-bank-bbva-to-offer-off-exchange-asset-custody/)