Binance gains US court approval to invest customer funds in US treasury bills

Binance has received regulatory approval to invest its customers’ fiat money into US Treasury bonds.

The approval was signed and issued by Judge Amy Berman Jackson, who oversaw the SEC v. Binance case. The decision only allows Binance to “invest certain client assets in U.S. Treasury Bonds.”

The court granted BAM Trading Services Inc. and BAM Management US Holdings Inc. (Binance) the flexibility to manage their assets more freely. The decision allows Binance to work with third-party investment advisors for its institutional assets, particularly U.S. Treasury bonds, as long as those advisors are not affiliated with Binance.

The court document also states that only “certain” funds can be deposited, and clarifies that these funds are currently in BitGo’s custody.

“Notwithstanding any applicable provisions of the Consent Order, BAM is authorized to invest certain customer fiat funds currently held at BitGo in U.S. Treasury bonds maturing on a four-week basis,” the court order stated, and then added three additional provisions.

“BAM is currently authorized to invest certain client fiat funds held at BitGo into U.S. Treasury bonds maturing in four weeks.”

Wild considering the SEC is investigating Paxos for sharing treasury bond revenue sharing for BUSD with Binance. https://t.co/lECpgjxe5f pic.twitter.com/J52TDvkBqy

— DeFiyst (@DeFiyst) July 19, 2024

The entire case involves the US Securities and Exchange Commission (SEC) taking legal action against Binance.US for allegedly failing to comply with regulatory requirements.

The charges cover issues related to the initial coin offering and sales of the BNB token and the BNB Vault program, as well as allegations of failure to register and fail to comply with anti-fraud regulations.

The SEC also charged former Binance CEO Changpeng Zhao for acting as a controlling person and requiring the trading platform to register under the Exchange Act.

Treasury bonds

US Treasury Bonds are a popular investment vehicle due to their reputation as one of the safest options, based on the full trust and credibility of the US government.

Additionally, Treasury bonds offer liquidity and a predictable yield, making them ideal for preserving capital while earning modest interest. By diversifying into Treasury Bonds, Binance can increase security and ROI for its users.