Recently, a US court granted Binance US the permission to invest certain customer fiat funds that are currently held at BitGo in US Treasury Bills. This decision came after the exchange requested court approval to invest approximately $40 million in increments of $10 million over a period of four weeks.
The investments will be made through a trading account on TreasuryDirect in US Treasury bills that will mature on a rolling four-week basis. Judge Amy Berman Jackson approved the exchange’s request under the condition that enough funds are maintained on the platform to meet all expected customer withdrawal requests. Furthermore, the terms of use must be updated to notify customers accordingly.
Apart from the approval to invest customer fiat funds, the judge also granted Binance US the authorization to engage third-party investment advisors to manage its corporate assets. Moreover, the exchange has been given the green light to transfer its custodied assets to a non-affiliated third-party custodian in the United States. Additionally, it has been ordered that new private and administrative keys for the wallets must be maintained and directed solely by employees in the United States or by the third-party custodian.
It is worth noting that Binance US, a subsidiary of the global Binance exchange, is currently involved in a legal battle with the US Securities and Exchange Commission (SEC). In a separate incident, the international Binance exchange collaborated with the US Federal Bureau of Investigations (FBI) San Diego to investigate a pig-butchering scam that led to the recovery of $2.5 million in USDT.
Pig-butchering scams are fraudulent schemes where perpetrators use manipulative tactics to gain victims’ trust online. Once trust is established, victims are persuaded to invest in a fake crypto scheme, leading to financial loss and emotional distress. The scammer typically convinces the victim to make additional payments before the fraud is uncovered. These scams have become increasingly prevalent, with over $2 billion being stolen through such schemes in 2022, according to the US Department of Justice.
The court approval granted to Binance US to invest customer fiat funds in US Treasury Bills has significant implications for the exchange. It highlights the importance of regulatory compliance and transparency in the crypto industry, especially in the face of ongoing legal battles and prevalent scams.
