In a recent development, a US court has granted Binance US the permission to invest a portion of its customer fiat funds, currently held at BitGo, in US Treasury Bills. This decision comes after the exchange requested the court’s approval to invest around $40 million in $10 million increments over a span of four weeks. The investments will be carried out through a trading account on TreasuryDirect in US Treasury bills that will mature on a rolling four-week basis.
Judge Amy Berman Jackson, on July 19, approved the exchange’s request to invest customer fiat funds, with the condition that Binance US must maintain a sufficient amount of funds on its platform to meet all expected customer withdrawal requests. Furthermore, the exchange must update its terms of use to notify customers regarding the investment decisions and any associated risks.
Aside from granting permission for the investment, the judge also allowed Binance US to engage third-party investment advisors to manage its corporate assets. Moreover, the exchange received authorization to transfer its custodied assets to a non-affiliated third-party custodian within the United States. It was specified that only employees of Binance US or the third-party custodian in the USA should have access to the private and administrative keys for the wallets holding the assets.
Legal Battles and Investigations
In a different legal matter, Binance US, the subsidiary of the global Binance exchange, is currently in an ongoing legal battle with the US Securities and Exchange Commission (SEC). On a different note, the international Binance exchange collaborated with the US Federal Bureau of Investigations (FBI) San Diego to investigate a pig butchering scam that recovered $2.5 million in USDT. These schemes involve fraudsters using manipulative tactics to gain victims’ trust online and lure them into investing in fraudulent crypto schemes, resulting in severe financial and emotional harm.
According to the US Department of Justice, pig-butchering scams have increased in prevalence, with scams totaling over $2 billion in stolen assets in 2022 alone. Victims are convinced to make additional payments before realizing the fraud, leading to devastating financial losses. It is essential for investors to exercise caution and conduct thorough due diligence before engaging in any investment opportunities to avoid falling victim to such scams.