TLDR
- Binance disclosed its minority Alpaca stake while describing securities trading access through ADGM licensing arrangements.
- Alpaca is stated to hold about 94 percent of tokenized US stock and ETF custody.
- The terms describe omnibus account custody, with customer assets pooled under Nest Trading Limited arrangements.
- Binance says Alpaca was chosen after considering execution quality, regulatory status, and market access criteria.
- The documents disclose PFOF revenue sharing and describe monitoring aimed at best execution duties compliance.
Binance has disclosed that it holds a minority stake in Alpaca as part of updated Securities Trading Terms covering access to securities trading services. The disclosure places Alpaca at the center of Binance’s stated execution and custody framework for tokenized US stocks and ETFs.
The terms state that Alpaca holds approximately 94% market share in the custody of tokenized US stocks and ETFs, making its role central to the service structure described by Binance. The documents identify Nest Trading Limited as the ADGM-authorized Binance entity acting as introducing broker for Securities Trading.
The service is described as offered globally under Binance’s Abu Dhabi Global Market license, although access remains restricted in several jurisdictions. The United States, mainland China, Hong Kong, the European Union, and other prohibited countries are listed among markets where availability may be limited.
Custody and Execution Framework
Under the terms, Alpaca will maintain a single legal omnibus brokerage account in the name of Nest Trading Limited as a client account. Customer assets may be pooled with assets of other Nest Trading Limited customers, while proprietary assets of Nest Trading Limited are not held in that account.
Binance states that users will not have individual accounts opened in their own names at Alpaca, except for limited purposes described in the terms. The documents also state that customers remain clients of Nest Trading Limited and receive protections under the Safe Custody Rules in the ADGM Conduct of Business Rulebook.
For order execution, Binance says Alpaca was selected after reviewing execution quality, access to US market centers, regulatory status, and liquidity access. Alpaca is described as a FINRA member broker-dealer that routes orders based on order size, security characteristics, available pricing, market data reliability, and automated processing capacity.
Revenue Sharing and Risk Notices
The terms disclose that Alpaca receives payment for order flow in connection with order execution. Binance and Alpaca have agreed to a revenue-sharing arrangement under which Binance receives 50% of the payment for order flow received by Alpaca.
Binance states that this structure creates a conflict of interest because revenue linked to payment for order flow could create an incentive when selecting or retaining an execution partner. The terms say Binance manages this conflict through execution-quality review, Alpaca’s US regulatory obligations, and ongoing monitoring of order execution.
The customer risk language states that users must make independent assessments before entering securities transactions and must understand the risks involved. Binance also states that it will not be liable for trading losses except where losses result from a breach of applicable regulatory obligations, including conduct duties under ADGM rules.
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