Binance is partnering with Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) to allow crypto customers to store their funds with the bank instead of keeping them directly on the crypto exchange, according to reporting by the Financial Times.
The move is aimed at rebuilding trust with investors after Binance was hit with a record fine from US regulators nearly two years ago.
Binance is the world’s largest cryptocurrency exchange by trading volume, and it handles billions of dollars in trades each day across hundreds of cryptocurrencies.
What does this mean for crypto?
BBVA, as a bank, will act as an "independent custodian" or a separate and trusted third party and ensure a greater level of safety when it comes to customers' funds or assets that are traded through Binance.
As the second largest bank in Spain and praised for its innovation and sustainability, BBVA will act as a security guarantee, giving traders a reduced risk while encouraging them to invest in the high-returns crypto exchange.
By storing them with BBVA, if Binance runs into trouble, like being hacked, declaring bankruptcy or facing regulatory action, the funds would still be safe with BBVA.
Banks are much more closely regulated than crypto exchanges, so BBVA's obligation to follow compliance rules should lead to more interest in crypto overall.
Essentially, the move is akin to putting your valuables in a safe or a secure bank, instead of being displayed in a storefront as they're being bought and sold.
Binance trying to clean up its reputation
Binance, the world’s largest crypto exchange, got slammed in 2023 with a record $4.3 billion (€3.69bn) fine after US regulators accused it of not keeping checks on its trading floor.
US officials said Binance allowed shady funds to flow through its exchange and allegedly permitted laundered money to be used, helping its big clients dodge the rules.
Founder Changpeng 'CZ' Zhao stepped down and served four months in prison for failing to stop money laundering.
Now, with regulators watching its every move, Binance is trying to clean up its act and by partnering with Spain’s BBVA, hopes to prove it can play by the rules.
