Binance, the world’s biggest crypto exchange, is now working with Spain’s third-largest bank, BBVA, to give customers a safer way to store their assets.
According to the Financial Times, Spanish and Latin American bank BBVA has recently started acting as an independent custodian for some clients of the world’s biggest crypto exchange.
Rather than holding all assets on the exchange, customers can now keep funds in U.S. Treasuries backed by BBVA. Treasuries can still be used as margin for Binance trades, but in the event of an exchange failure, the assets are protected under the bank’s management.
This step is aimed at mitigating risks for investors and avoiding the scenario of the FTX meltdown in 2022 when billions were trapped. It follows Binance forking out a $4.3 billion fine in 2023 for anti-money laundering breaches. Binance has already partnered with other third-party custodians such as Sygnum and FlowBank, but BBVA’s credibility might make investors even safer.
BBVA has been incrementally building its presence in the crypto space. It introduced Bitcoin and Ethereum trading as well as custody services earlier this year via its mobile app. The bank also recommended that its high-net-worth clients invest between 3% and 7% of their portfolios in cryptocurrencies.
Exchanges such as Deribit, OKX, and Bitget have launched these kinds of services so that people can trade while holding their assets in separate, safe custody. This setup, common in traditional finance, creates a safeguard between where assets are stored and where trades are made, helping to prevent another “FTX 2.0.”
Also Read: Swiss Bank Sygnum Announces $SUI Custody, Trading, and More
