Binance.US has received court approval to invest certain customer fiat funds in US Treasury Bills.
On July 19, Judge Amy Berman Jackson allowed the crypto exchange to proceed with investments under strict conditions, which ensured responsible and transparent fund management.
Court Mandates Binance.US to Maintain Transparency in Treasury Investments
The court’s approval will enable Binance.US to invest approximately $40 million. The firm will invest $10 million in increments over four weeks through a TreasuryDirect trading account.
“Notwithstanding any applicable provision of the Consent Order, [Binance.US] BAM is authorized to invest certain customer fiat funds currently custodied at BitGo in United States Treasury bills that will mature on a rolling four-week basis provided that no third parties, including Binance Entities, are involved in the investment,” the court document reads.
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The exchange must transfer its custodied assets to a non-affiliated third-party custodian in the US. Binance.US employees in the US must solely control the new private and administrative keys for these wallets. Alternatively, they can be managed by a third-party custodian.
Moreover, the court order mandated Binance.US to maintain an adequate amount of USD on its platform. This ensures they can meet all potential customer fiat withdrawal requests, with the calculation based on historical withdrawal activity. Additionally, as part of broader transparency requirements, Binance.US must provide detailed monthly reports outlining any costs related to maintaining these Treasury investments.
Judge Jackson also mandated that Binance.US conduct thorough due diligence to ensure that the advisors managing its assets do not qualify as Binance entities. This due diligence is vital to preventing conflicts of interest and ensuring customer funds are handled with the highest level of integrity.
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This court approval follows a federal judge’s decision in June to dismiss part of the US Securities and Exchange Commission’s (SEC) lawsuit against Binance and its founder, Changpeng Zhao. However, the court allowed other charges, including those against the holding company for Binance.US, to proceed.
These charges encompass the initial coin offering (ICO), ongoing sales for BNB, BNB Vault, staking services, and allegations of fraud and failure to register. The judge also dismissed charges related to secondary BNB sales and Simple Earn.
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