Binance Arms BBVA with Crypto Custody to Avert Another FTX-Style Meltdown

In a strategic power move, Binance has granted Spanish banking giant BBVA institutional-grade crypto custody rights—a preemptive strike against centralized exchange failures.

The playbook? Distribute trust before regulators force their hand. Because nothing says 'we learned our lesson' like outsourcing your vaults to traditional finance.

One cynical observer noted: 'Banks guarding crypto keys? Next they'll hire arsonists to run fire departments.'

Binance wants to prevent an ‘FTX 2.0’

The FTX collapse was largely due to the fact that it did not use third‑party custody, a critical safeguard that keeps customer assets separate, independently audited, and under regulatory oversight instead of on exchanges.

Instead, FTX (FTT) held customer funds on its own books, mixing them into its corporate resources, and allowing its sister company, Alameda Research, to access those assets. This lack of separation and oversight enabled massive misappropriation from the earliest days of the exchange until it filed for bankruptcy

When the exchange collapsed in late 2022, investors were left reeling as their funds were locked in bankruptcy proceedings. Since the FTX incident, more traders have opted for independent custody arrangements so that exchanges do not hold too much of their funds.