Recently, a US court granted Binance US the authority to invest specific customer fiat funds, currently held at BitGo, in US Treasury Bills. This decision came after the exchange requested court approval to invest approximately $40 million in $10 million increments over a period of four weeks. The funds will be invested 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 request made by the exchange, with certain conditions attached. The first condition is that Binance US must maintain sufficient funds on its platform to fulfill all expected customer withdrawal requests. Additionally, the exchange must update its terms of use to inform customers about these investments. The judge also gave the green light for other requests, including the authorization to engage third-party investment advisors to manage corporate assets and transfer custodied assets to a non-affiliated third-party custodian located in the United States.
As part of the approval process, Judge Jackson emphasized the need for heightened security measures. Binance US must ensure that the new private and administrative keys for the wallets are maintained and controlled exclusively by its employees in the United States or by the third-party custodian also based in the United States. Furthermore, the exchange is required to conduct thorough due diligence to confirm that the advisors managing its assets are not affiliated with any Binance Entities.
Despite receiving approval for the investment of customer funds, Binance US is currently involved in a legal dispute with the US Securities and Exchange Commission (SEC). In a separate development, the international Binance exchange collaborated with the US Federal Bureau of Investigations (FBI) San Diego in uncovering a pig butchering scam that resulted in the recovery of $2.5 million in USDT.
Pig butchering schemes are fraudulent activities where scammers employ deceitful tactics to gain victims’ trust online. Once trust is established, victims are persuaded to invest in a fake crypto scheme. The fraudster typically convinces victims to make additional payments before disappearing with their assets, leading to significant financial and emotional damage. According to the US Department of Justice, these scams have become increasingly common, with over $2 billion stolen through such schemes in 2022.
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