Binance Gets Approval to Invest User Funds in US Treasury

Binance.US’s entities, BAM Trading Service and BAM Management US Holdings Inc., have received court approval to invest some of their users’ funds in the US Treasury. In a ruling by Judge Amy Berman Jackson of the US District Court for the District of Columbia, Binance.US can invest some of its customers’ funds through a third-party system.

According to the ruling, Binance.US can use some of the funds held by BitGo for the investment. However, the leading exchange by number of users and trading volume’s subsidiary would have to use a third-party custodian not affiliated with the exchange.

“Notwithstanding any applicable provision of the Consent Order, 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,” the court filing said.

Four-Week Maturity Period

The approval for BAM to invest its customer funds in the US Treasury carries a four-week maturity clause, meaning that the exchange cannot buy bills with an investment window of over a month.

The court also ruled that Binance.US’s Treasury bills venture should not affect withdrawals from the exchange. Judge Jackson noted that BAM should still have enough dollars to process customer withdrawal requests even after the investment.

The Friday ruling was part of an ongoing case between Binance.US and the US Securities and Exchange Commission (SEC). The SEC sued Binance and its former CEO, Changpeng Zhao, alleging they defrauded their customers and sold unregistered securities to US citizens.

An earlier ruling saw the court dismiss part of the plaintiff’s lawsuit that argued that the secondary sales of BNB were securities. However, Binance would have to defend itself on charges that the sales of BNB and its staking services were unregistered securities.