- BBVA has started to offer off-exchange custody for the Binance cryptocurrency platform.
- This service allows traders to store assets with an independent bank, reducing risk related to exchanges.
- Assets include U.S. Treasuries, which are held as collateral, and potentially direct custody of crypto holdings.
- Off-exchange custody began for Binance in early 2023 through Swiss bank Sygnum, and was later extended to other providers like FlowBank.
- This move is part of a broader industry response to concerns raised after the 2022 collapse of the FTX crypto exchange.
BBVA, a leading bank based in Spain, is now providing off-exchange custody services for the cryptocurrency exchange Binance. This change enables cryptocurrency traders to keep their assets in the safety of a regulated bank rather than storing them directly with the exchange. The new arrangement is intended to decrease counterparty risk and ensure that customers’ holdings remain separate from the exchange’s own assets.
According to a report by the Financial Times, BBVA is taking responsibility for safeguarding U.S. Treasuries, which are being used by Binance as collateral for customer activities. The report also suggests that BBVA may be directly responsible for holding crypto assets in addition to these U.S. Treasury bonds.
The adoption of off-exchange custody methods began early last year when Binance partnered with Swiss digital asset bank Sygnum. This service was previously also provided to crypto derivatives platform Deribit, before its acquisition by Coinbase. Another institution, FlowBank in Switzerland, was involved in similar third-party custody services but was shut down in 2023 by Swiss regulator FINMA.
Off-exchange custody means an independent bank stores customer assets instead of leaving them on the exchange. This approach aims to provide more security, especially after high-profile incidents such as the 2022 collapse of the FTX crypto exchange.
Industry sources have stated that these security moves are meant to address fears about exchanges’ reliability when it comes to client asset protection. By involving established banks like BBVA, crypto participants are given greater reassurance about the safety and segregation of their holdings.
No additional financial figures or further details on the total assets involved were disclosed. The arrangement is part of a growing trend among exchanges to meet rising regulatory and customer demands for increased asset protection and transparency.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Bitcoin Soars as Fed Rate Cut Bets Rise, Crypto Rebounds to $4 Trillion
- China Orders Firms to Halt Stablecoin Research, Tightening Clampdown
- 60 Malicious Packages Target RubyGems, PyPI in Credential Theft Campaign
- Standard Chartered, Animoca JV Apply for Hong Kong Stablecoin License
- GreedyBear Malware Uses Fake Firefox Wallet Extensions to Steal $1M
