Binance grants Spanish bank BBVA crypto custody rights to prevent ‘FTX 2.0’, according to a new report by the Financial Times. The move is part of the crypto exchange’s broader strategy to enhance asset security and rebuild user trust in the wake of past industry failures.
Sources close to the matter reveal that Binance is collaborating with Banco Bilbao Vizcaya Argentaria (BBVA), Spain’s third-largest bank, to offer secure off-exchange storage for digital assets. Under the arrangement, customers’ crypto assets will be held in custody by BBVA, rather than on Binance’s platform.
Strengthening Asset Security With Traditional Banking Partners
To further minimize risk, traders’ funds will be stored in U.S. Treasuries held by BBVA, which Binance will then accept as collateral for trading activities on its platform. This custodial setup ensures assets are kept separate from exchange operations, addressing one of the core failures that led to the FTX collapse in 2022.
According to insiders, this proactive partnership aims to prevent a repeat of events like the FTX downfall, sometimes referred to as a potential ‘FTX 2.0’ scenario. One source described the initiative as a “preemptive move” designed to safeguard client assets and increase transparency.
Demand Grows for Third-Party Crypto Custody
Many crypto traders and institutional investors now prefer third-party custody services over keeping assets directly on exchanges. This shift in preference follows growing concerns around counterparty risk and insufficient asset segregation, as highlighted by the FTX crisis.
Previously, Binance users could store their assets either directly on the exchange or via CeFiX, a Binance-affiliated custodian that has drawn scrutiny from U.S. regulators for its opaque structure. The new partnership with BBVA signals a shift toward more regulated and transparent custody solutions.
In recent months, Binance has expanded its list of trusted custodians to include regulated financial institutions like Sygnum Bank and FlowBank in Switzerland. These collaborations are intended to reassure users that their funds are protected under strict banking standards and are less vulnerable to internal misuse or platform failures.
Learning from FTX: A Cautionary Tale
The downfall of FTX exposed major flaws in how centralized exchanges handle customer funds. FTX failed to use third-party custodians, choosing instead to mix user assets with its own corporate finances, an approach that ultimately led to billions in losses and widespread investor fallout.
By contrast, Binance’s new custody model ensures that assets remain off the exchange’s balance sheet and are managed under traditional banking regulations. This structure is designed to prevent another catastrophic event in the crypto space and protect user assets from similar mismanagement.
Conclusion
Binance grants Spanish bank BBVA crypto custody rights to prevent ‘FTX 2.0’ as part of a broader effort to prioritize transparency, reduce counterparty risk, and restore confidence in centralized crypto exchanges. As the industry evolves, partnerships with regulated financial institutions may become the new standard for digital asset custody.
