Binance has teamed up with BBVA, one of the largest banks in Spain, to act as an independent goalkeeper for customer funds, according to a Friday report in the Financial Times, citing two people familiar with the arrangement.
This decision would aim to restore confidence in the centralized cryptography investment following scandals such as the collapse of the FTX and Binance’s own regulatory problems.
The FT report has indicated that Binance users can now have assets with BBVA, offering an improved guarantee thanks to guarantees supported by banks. Binance has also established a partnership with the Sygnim and the Flowbank of Switzerland to serve as independent guards.
With traditional finance involved in providing safer and more regulated childcare solutions, Binance’s decision can help fill the gap between institutional investors and cryptographic ecosystem, according to the FT.
The FT sources have indicated that the Binance custody agreement with BBVA implies customer funds held in the US Treasury at the Spanish bank. Binance then accepts these assets as a margin to negotiate on its platform, reducing the risk of counterpart.
Cointelegraph contacted Binance to confirm its partnership with BBVA. Binance admitted to having received the request but had not provided other details by publication.
Continuous access to customer funds
The sources have told the FT that Binance had teamed up with only a handful of banks for the independent custody of customer funds, but added that BBVA has a better “name recognition” than other banking partners, adding a layer of trust.
On Thursday, Binance also launched a service to support the conversion of the crypto to Fiat and the withdrawal directly into a mastercard for European users, with an almost real availability. This decision aims to rationalize the discharge of funds for users of the European Economic Area (EEE) and the United Kingdom.
In relation: Binance ends the business trade in Europe to comply with the rules of Mica
Before bankkeepers, Binance Crypto investors relied entirely on the exchange of storage of assets. The execution of custody to credible banks adds a protective layer to user funds.
For example, the collapse of the FTX exchange in 2022 blocked the access of many customers to their funds, causing substantial financial pressure and an increased regulatory examination through the cryptography ecosystem. FTX has locked around $ 175 million in Genesis Trading Investments alone.
Wazirx continues to keep customer funds hostage
Investor fears were recently renewed when Indian Crypto Exchange Wazirx, which once had close links with Binance, frozen withdrawals for its 16 million users following a major security violation.
While Wazirx tried to tighten the binance in the reimbursement of losses, the latter moved away from the Indian exchange, saying:
“Their [WazirX’s] Attempts to modify responsibility are a disappointing diversion tactic, but it should not distract anyone from the blatant question to be resolved here: the need for the Wazirx team to be held responsible for the funds of lost user under their direction. »»
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