Federal Judge Approves Binance.US Investment in U.S. Treasury Bills

Cryptocurrency exchange Binance’s U.S. affiliate, Binance.US, received approval from a federal judge on Friday to invest certain customer assets in U.S. Treasury bills. This order alleviates restrictions previously imposed by the U.S. Securities and Exchange Commission (SEC).

Transfer to Third-Party Custodian:

According to the court order, Binance will transfer cryptocurrency assets to a third-party custodian not affiliated with the exchange. This standard aims to ensure the security and proper handling of customer assets.

Investments in U.S. Treasury Bills:

Binance.US operator BAM can invest certain customer fiat funds, held by crypto custody firm BitGo, in U.S. Treasury bills. These investments will mature on a rolling four-week basis, provided that no third parties, including any Binance entities, are involved in the investment process.

SEC’s Lawsuit and Allegations:

In June last year, the SEC sued Binance, its CEO and founder Changpeng Zhao, and Binance.US’s operator. The SEC’s allegations include:

• Artificially inflating trading volumes.
• Diverting customer funds.
• Failing to restrict U.S. customers from its platform.
• Misleading investors about its market surveillance controls.

Agreement with the SEC:

Later that month, Binance and Binance.US entered into a contract with the SEC to ensure that U.S. customer assets remain within the United States. This agreement is part of ongoing efforts to comply with regulatory needs and restore investor confidence.

This approval represents a significant step for Binance.US as it navigates regulatory challenges and works to secure and manage customer assets more effectively.