Recently, a US court granted Binance US permission to invest a portion of its customer fiat funds, currently held at BitGo, in US Treasury Bills. The exchange requested court approval to invest around $40 million in $10 million increments over four weeks. This move will allow Binance US to utilize a trading account on TreasuryDirect to invest in US Treasury bills that will mature on a rolling four-week basis.
On July 19, Judge Amy Berman Jackson approved the exchange’s request to invest customer fiat funds. However, certain conditions were imposed to ensure the safety and transparency of these investments. Binance US must maintain sufficient funds on its platform to accommodate all expected customer withdrawal requests. In addition, the terms of use must be updated to inform customers about this investment strategy.
Apart from allowing the investment of customer fiat funds, the Judge also granted other requests made by Binance US. These included the authorization to involve third-party investment advisors to manage corporate assets and transferring custodied assets to a non-affiliated third-party custodian in the United States. It was also specified that the new private and administrative keys for the wallets must be controlled solely by the exchange’s employees in the United States or the third-party custodian located in the United States.
As a subsidiary of the global Binance exchange, Binance US is currently engaged in a legal dispute with the US Securities and Exchange Commission (SEC). Meanwhile, the international Binance exchange assisted the US Federal Bureau of Investigations (FBI) San Diego in uncovering a pig butchering scam that resulted in the recovery of $2.5 million in USDT.
Pig-butchering scams are fraudulent schemes where individuals are deceived through manipulative tactics online. Victims are persuaded to invest in a fake cryptocurrency scheme after gaining their trust. As the scam progresses, victims are often coerced into making additional payments before realizing the fraud. This results in severe financial and emotional damage to the victims. According to the US Department of Justice, over $2 billion was stolen through these types of scams in 2022.
The court’s decision to allow Binance US to invest customer fiat funds in US Treasury Bills has significant implications for the exchange and its customers. It is essential for Binance US to adhere to the conditions set forth by the court to ensure transparency and accountability in its investment practices.