Key Points:
- A US court has authorized Binance to invest US customer funds in Treasury Bills.
- The company must report the costs of maintaining Binance customer funds in its monthly business expense reports.
A United States court has granted cryptocurrency exchange Binance the authorization to invest US customer fiat funds into US Treasury Bills.
US Court Approves Binance Customer Funds Investment in Treasury Bills
The approval, outlined in a recent court filing, allows Binance customer funds allocated into US debt securities through a third-party investment manager. The order, issued by the United States District Court for the District of Columbia on July 19, requires Binance to avoid reinvesting these funds back into the company or any related entities.
The court’s decision mandates Binance to report the costs associated with maintaining these investments in its monthly business expense reports and detail them in its operational reports. The move underscores cryptocurrency’s potential role in bolstering the US dollar amidst de-dollarization efforts by BRICS nations.
Experts suggest that using collateralized stablecoins to buy and hold US debt instruments could help extend US dollar dominance and mitigate the effects of prolonged inflation caused by years of poor monetary and fiscal policies.
Binance Required to Report Investment Costs
The approved Binance customer funds are short-term debt securities issued by the government, maturing on a rolling four-week basis, provided that no third parties, including the company entities, are involved in the investment.
The court also said that the new private and administrative keys for the wallets must be managed solely by Binance employees in the United States or by a third-party custodian located in the country. Additionally, Binance is required to conduct due diligence to ensure that the advisors managing its assets do not qualify as Binance entities.
Binance.US, the subsidiary of the global Binance exchange, is currently embroiled in a legal battle with the US Securities and Exchange Commission (SEC). Last year, the SEC accused Binance of inflating trading volumes, diverting customer funds, and misleading investors. Despite these challenges, Binance continues to navigate its regulatory issues and adapt to the evolving landscape of cryptocurrency regulation in the US.
