Binance goes to the Spanish bank BBVA to guard customer assets: report

By Hannah Pérez

Binance collaborates with the third largest bank in Spain, BBVA, for the custody of customer assets outside the exchange.

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• Binance collaborates with the third largest bank in Spain, BBVA, for asset custody.
• Customer assets are kept in the bank as US Treasury bonds.
• In this way, the assets are isolated from any interruption that may occur in the Exchange.
• A sign of the inclination of banks to integrate more closely with cryptocurrencies.
• Meanwhile, exchanges are increasingly looking for confidence and transparency to users.

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Binancethe largest cryptocurrency exchange in the world by volume of operations, is resorting to the giant Spanish bank BBVA for the custody of customer assets outside the platform.

The news agency Financial Times (FT) reported on Friday, citing familiar people, the decision of Binance to hire the third largest bank in Spain to provide custody services while seeking to improve customer protection.

This collaboration seeks FTX In 2022 and the record fine of 4.3 billion dollars imposed on Binance By US authorities in November 2023, the report points out.

Binance is associated with BBVA for custody

Acting as an independent custodian, BBVA stores customer assets of Binance In US Treasury Bonds. These bonds are accepted by Binance as margin to operate, creating a barrier between trade activities and custody of the funds.

This practice, common in traditional but less usual finances between crypto companies, seeks to reduce the risk of counterpart and protect investors in case of possible bankruptcy of the stock market, a scenario that has been called as a “hypothetical ftx 2.0”.

The collapse of FTX He left billions of dollars trapped in bankruptcy procedures, which led cryptocurrency operators to demand greater security guarantees. The fine of Binancerelated to failures in the prevention of money laundering, fraud and sanctions violations, it has also promoted the stock market to implement measures to recover user confidence.

When using US government bonds to separate commercial activities from the funds that support the transactions of customers from Binancethe assets are isolated from any interruption that may occur on the cryptocurrency platform.

BBVA integrates banking and cryptocurrencies

Collaboration also seems to be a reflection of a growing disposition among traditional banks to strengthen ties with the cryptocurrency sector; A trend promoted by the new regulations, in the United States promoted by the support of the Trump administration, and in Europe by the Mica Law, which provides a legal framework for the asset class.

For BBVA, this is not the first effort of the Spanish lender in the integration of cryptocurrencies with traditional banking. Last month, the bank enabled the purchase, sale and custody of Bitcoin and Ethereum For his retail customers in Spain, directly from the bank’s app, after launching the service previously in Switzerland and Türkiye.

It is also reported that it has recommended its private banking customers to assign between 3% and 7% of their wallets to cryptocurrencies.

According to a source cited by the Financial Timeswho talked about collaboration with Binancethe name of BBVA streamlies the processes of due diligence, since it is a known and reliable entity. “If you say bbva, people say ‘approved, next’“, Said the anonymous source, highlighting the credibility provided by the bank.

Binance provides confidence and transparency

Binance It is not the only platform that is adopting out -of -stock custody solutions. Other important bags, such as Delibit, OKX and Bitgethave implemented similar arrangements, as highlighted The Block.

These initiatives reflect a broader trend in the cryptocurrency sector towards strictest controls and greater transparency in the management of user funds. From the adoption of reservation tests (PROOF-OF-RESERVES) Until the separation of custody and trading, the bags seek to align with more robust financial standards.

Before joining BBVA, Binance had begun to allow last year that his great clients use independent custodians as Sygnum and FlowBank. Previously, users were limited to keeping their assets in the bag itself or with CEFFUa custody partner described by the US stock and values commission (SEC) as a “Binance renaboutized entity“

Other measures that the exchange has adopted include the Reserve test, a chain fund tracking method through which customers can confirm that the balance it manages Binance coincides with that of his wallets.

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Article written with the help of AI, edited by Hannah Pérez / Diariobitcoin

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