Binance.US Secures Court Approval to Invest Customer Assets in U.S. Treasury Bills

In a significant development for the cryptocurrency industry, Binance.US has received approval from a federal judge to invest certain customer assets in U.S. Treasury Bills. The decision, handed down by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia on July 19, 2024, marks a notable shift in the ongoing litigation between Binance and the U.S. Securities and Exchange Commission (SEC).

The court order permits Binance.US, operated by BAM Trading Services Inc. and BAM Management US Holdings Inc., to invest customer fiat funds currently custodied at BitGo in U.S. Treasury Bills. These investments will mature on a rolling four-week basis, providing a balance between liquidity and returns. Importantly, the order stipulates that no Binance entities can be involved in the investment process, and BAM must maintain sufficient dollars on its platform to meet customer withdrawal requests.

Additionally, the court has authorized Binance.US to engage third-party investment advisors for managing its corporate assets, as long as these advisors are not affiliated with Binance. The exchange is also required to transfer customer cryptocurrencies to an independent third-party custodian.

Binance.US hailed the decision as a win for both the company and its community, stating that it frees their business from restrictions previously imposed by the SEC. The exchange emphasized that this move will enable more effective management of their corporate treasury while diversifying the way customer funds are custodied.

U.S. Treasury Bills are widely regarded as one of the safest investment options, backed by the full faith and credit of the U.S. government. This investment strategy could potentially offer Binance.US customers a modest return while preserving capital, enhancing the overall safety and stability of their assets.

The ruling comes amidst ongoing legal challenges faced by Binance, including a lawsuit filed by the SEC in June 2023. The regulator accused Binance of various infractions, including artificially inflating trading volumes, diverting customer funds, and failing to restrict U.S. customers from its global platform.

While this decision represents a positive step for Binance.US, it’s important to note that the broader legal battle with the SEC continues. Judge Jackson recently rejected most of Binance’s motion to dismiss the SEC’s case, though some points were dismissed, including allegations related to secondary sales of the BNB token.