Overview

• Under the agreement announced August 8, BBVA will store Binance users’ funds in U.S. Treasuries off the exchange, with Binance accepting those bonds as trading margin.
• The custody structure isolates trading operations from asset backing to reduce counterparty and operational risks and guard against a repeat of the 2022 FTX collapse.
• This arrangement is Binance’s largest external custody deal to date, expanding on earlier partnerships with Switzerland’s Sygnum and FlowBank.
• BBVA secured approval under the EU’s Markets in Crypto-Assets framework this year and has rolled out crypto trading and custody services advising clients on Bitcoin and Ether allocations.
• If Binance were to encounter financial distress, customer funds would remain protected in Treasuries held by BBVA rather than on the exchange.