Binance discloses revenue-sharing deal with Alpaca for stock trading

Binance just pulled back the curtain on how it plans to make money from stock trading, and the numbers are worth paying attention to. A legal document published Tuesday reveals the exchange will collect 50% of Alpaca’s payment-for-order-flow (PFOF) fees and 65% of the remaining profit from user stock lending after interest is paid out to users.

How the deal actually works

Alpaca, a brokerage infrastructure API provider registered with the SEC and FINRA, serves as the clearing broker and custodian for Binance’s stock trading operations. Binance’s entity Nest Trading Limited acts as the introducing broker, essentially funneling users to Alpaca’s rails.

The arrangement gives eligible global users access to over 7,000 US-listed stocks and ETFs. Trading is available 24 hours a day, five days a week, with a minimum entry point of just $5. Platform fees start at roughly $0.35 per trade.

Binance has also taken a minority equity stake in Alpaca as part of this partnership.

The stock lending piece is arguably more lucrative on a per-user basis. When users hold shares, those shares can be lent to short sellers in exchange for interest. Users get some of that interest. After they’re paid, Binance takes 65% of whatever is left. Alpaca keeps the remaining 35%.

Why Alpaca matters more than you think

Alpaca controls approximately 94% of the market share in tokenized US stock and ETF custody. That near-monopoly position makes it the default plumbing for anyone trying to bridge traditional equities and crypto infrastructure.

This partnership also sets the stage for Binance’s planned launch of bStocks, tokenized equities that would trade on the BNB Chain.

What this means for investors

The zero-commission framing is worth examining closely. Binance isn’t charging users a visible trading fee on stocks. But between PFOF revenue, stock lending profits, and platform fees, the exchange has built multiple income streams from user activity.

Robinhood generated $974 million in transaction-based revenue in 2024, almost entirely from PFOF and related mechanisms.

The regulatory risk is the elephant in the room. PFOF has been banned in the UK, Canada, and Australia. The European Union restricted it under MiFID II rules. In the US, the SEC has repeatedly studied whether to curtail the practice.

There’s also the question of how stock lending risk is communicated to users. When shares are lent out, the user temporarily loses certain protections, including SIPC coverage on those specific shares.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.