Recently, a US court has given Binance US the green light to invest certain customer fiat funds, which are currently being held at BitGo, in US Treasury Bills. The exchange sought approval to invest approximately $40 million in $10 million increments over a four-week period. These investments will take place through a trading account on TreasuryDirect, focusing on US Treasury bills that will mature on a rolling four-week basis. Judge Amy Berman Jackson granted approval for the exchange to invest its customer fiat funds, with the condition that enough funds are maintained on the platform to meet all expected customer withdrawal requests. Furthermore, Binance US must update its terms of use to inform customers of this investment opportunity.
In addition to allowing the investment of customer fiat funds, Judge Jackson also granted other requests made by Binance US. These include authorization to hire third-party investment advisors to manage corporate assets and transfer custodied assets to a non-affiliated third-party custodian within the United States. It was also stipulated that new private and administrative keys for the wallets must be controlled solely by employees in the US or the third-party custodian in the US. Moreover, the exchange must conduct due diligence to ensure that the advisors managing its assets do not have any ties to Binance Entities.
While Binance US is navigating a legal dispute with the US Securities and Exchange Commission (SEC), the global Binance exchange has been involved in assisting the US Federal Bureau of Investigations (FBI) San Diego with a pig butchering scam investigation. This scheme, which led to the recovery of $2.5 million in USDT, is a common tactic used by fraudsters to deceive victims online. Victims are persuaded to invest in a phony crypto scheme, resulting in financial and emotional distress when the scammer absconds with their assets. According to the US Department of Justice, pig-butchering scams have become increasingly prevalent, with over $2 billion stolen through such schemes in 2022.
The court’s decision to allow Binance US to invest customer fiat funds in US Treasury Bills opens up new investment opportunities for the exchange. By complying with the court’s conditions and ensuring the security of custodied assets, Binance US can expand its investment portfolio and provide customers with potentially lucrative returns. As the legal battle with the SEC continues, the exchange remains vigilant in safeguarding its assets and assisting in investigations to combat fraudulent schemes in the crypto space.
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