Key Points
- Binance is partnering with Spanish bank BBVA to hold customer crypto assets. BBVA will act as an independent custodian.
- The move is designed to increase fund safety and rebuild trust with users and regulators.
- It comes after the 2022 collapse of FTX, which raised fears about the safety of funds on exchanges.
- Binance is making this move as it faces intense regulatory scrutiny following a $4.3 billion fine.
In a significant move to reassure customers and regulators, crypto exchange Binance is partnering with Spanish bank BBVA to allow clients to hold their digital assets with the bank instead of on the exchange itself. The Financial Times first reported the news on Friday.
Under the new arrangement, BBVA will act as an independent custodian for Binance. This means the bank will be responsible for safeguarding customer funds, creating a firewall between the clients’ assets and Binance’s operations.
This is a direct response to two major problems plaguing the crypto industry. The first is the intense regulatory pressure Binance has faced globally. The company was recently hit with a massive $4.3 billion fine in the U.S. for failing to prevent illegal activity, a scandal that landed its founder, Changpeng “CZ” Zhao, in prison.
The second is the lingering fear from the 2022 collapse of rival exchange FTX. The FTX scandal revealed how the exchange had misused customer funds, wiping out billions of dollars and destroying investor confidence.
By using a trusted, traditional bank like BBVA as a custodian, Binance aims to demonstrate that customer funds are secure and won’t be mishandled.
This partnership is a clear attempt by Binance to clean up its image and demonstrate that it is moving toward a more mature and regulated business model, one that a mainstream financial institution is willing to work with.
