1. What role does BBVA play in the fund protection model?

BBVA, one of the largest and most reputable banks in Spain, will act as an 'independent custodian', meaning a third party holds customers' assets instead of Binance holding them. Specifically, the assets are transferred to BBVA in the form of U.S. Treasuries, and these bonds will be used by Binance as margin for trading — a solution aimed at separating the trading platform from the underlying assets.

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2. What are the benefits of this model?

Benefits

Description

Reduce counterparty risk

If Binance faces legal issues, gets hacked, or collapses, customers' money remains safe at BBVA. This is a more robust model compared to traditional crypto exchange custody.

Increase investor trust

BBVA is a reputable traditional bank under strict regulation. This helps Binance reassure users, especially after FTX and previous scandals.

Meeting current legal trends

The separated custody/trading model meets the transparency and financial safety requirements that regulators are advocating for — such as the EU with MiCA and similar measures in the US.

3. Is this the first time Binance has done this?

Not entirely. Earlier, from the beginning of 2024, Binance also allowed the use of independent custodians like Sygnum and FlowBank in Switzerland to custody assets off-exchange. However, BBVA is seen as a more prominent choice due to its strong reputation and high recognition, especially within the European community.

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4. Broader strategic significance

• The collaboration with BBVA reflects a clear trend: major crypto exchanges are trying to 'become more transparent and secure' through ties with traditional financial institutions.

• At the same time, this is also a clever strategic signal in the context of increased oversight and the desire to restore trust from individual and institutional investors.

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Summary

The Binance-BBVA partnership is not only an important pivot to protect user assets but also marks a significant step towards the integration of the crypto market with the traditional financial system. This could become a reference model for other exchanges in the future.