Key Takeaways:
Binance's revenue-sharing agreement with brokerage infrastructure provider Alpaca gives the world's largest crypto exchange a direct financial stake in traditional equities trading, formalizing a partnership that could reshape how crypto-native users access US stock markets.
Binance disclosed Tuesday that it will receive 50% of Alpaca's payment-for-order-flow fees and 65% of remaining profit from user stock lending under the terms of its Securities Trading agreement. The arrangement, published in Binance's updated terms of service, covers the exchange's stock trading product that offers access to more than 7,000 US-listed stocks and exchange-traded funds.
"Binance's partnership with Alpaca creates a layered revenue structure that aligns both companies' incentives around growing tokenized equity volumes," Diana Chen, a crypto regulation and exchange compliance analyst, said. "The 65% profit share on stock lending is particularly significant — it positions Binance as a core economic participant in the custody and lending operation, not just a distribution partner."
Alpaca holds approximately 94% market share in the custody of tokenized US stocks and ETFs, according to data from RWA.xyz. The company reported $480 million in assets under custody as of December 2025, representing 29% of the $1.62 billion total tokenized stock market. The broader tokenized stock market rose about 29% over the past 30 days, while holder counts climbed 35% to 304,700 — though monthly active addresses fell more than 77% to 31,877, suggesting investors are holding rather than actively trading these assets.
Binance also holds a minority equity stake in Alpaca, though the exact size has not been disclosed. Alpaca raised $150 million at a $1.15 billion valuation in January for its brokerage infrastructure, which now supports execution, clearing, settlement, and custody for Binance's stock trading product, as well as dividend payments and corporate actions.
How the revenue-sharing structure works
The commercial terms go beyond a standard referral arrangement. Under the agreement, Binance receives half of all payment-for-order-flow fees that Alpaca collects from market makers for routing stock orders through its platform. PFOF is a standard revenue stream in retail equity trading, and the 50% split gives Binance meaningful exposure to trading volumes without operating its own brokerage infrastructure.
On stock lending, the structure is more aggressive. After Alpaca pays interest to users whose shares are being lent, Binance receives 65% of the remaining profit. Stock lending revenue can be substantial during periods of elevated short-selling activity, and the 65% cut suggests Binance is underwriting some of the operational risk in the lending program.
Competitive landscape heats up
Binance is not alone in pushing beyond crypto into traditional equities. Gate, founded in 2013 and serving more than 54 million users, announced a separate partnership with Alpaca on the same day to offer trading across more than 10,000 stocks and ETFs, with fractional share trading starting at $1 and USDT-denominated settlement.
Kraken launched 11,000 US-listed stocks and ETFs with commission-free trading in April 2025, while Vienna-based Bitpanda expanded to about 10,000 stocks and ETFs in January. Bitget has also moved into equity-adjacent products, launching a SpaceX-linked pre-IPO futures contract in May.
The convergence between crypto exchanges and traditional brokerages raises regulatory questions. Binance, which has faced enforcement actions from the US Securities and Exchange Commission and other global regulators, is now operating in a space directly overseen by securities authorities. The partnership with Alpaca, a US-regulated broker-dealer, may provide a compliance framework — but the revenue-sharing structure could attract scrutiny over how tokenized stock products are classified and whether they comply with securities laws in key jurisdictions.
This article is for informational purposes only and does not constitute investment advice.
