- Binance Invests Customer Funds in US Treasuries
- A cloud of legal troubles continues to follow Binance globally
Despite the recent rise of the BNB and the stock market’s constant troubles with the law, Binance has increased. In a significant turn of events, a district court in the District of Columbia in the United States has authorized the exchange platform to invest in US Treasuries.
A victory for Binance?
According to a recent court filing from the United States District Court for the District of ColumbiaBinance may invest a specific amount of its customers’ funds by using a third-party investment manager. The filing explains that the company must ensure that all investments should not flow into the company or any related operations.
In detail, the court’s decision states:
“BAM” Motion for Relief from Consent Order (Dkt. No. 71) to (1) engage third-party investment advisors to invest in BAM’s business assets; (2) invest certain client assets in U.S. Treasury securities; and (3) transfer crypto assets to an unaffiliated third-party custodian or custodian. Having considered the motion, the Court concludes that the motion should be granted.”
Source: United States District Court
However, the ruling also ordered the company to ensure that it has enough U.S. dollars so that customers can withdraw money at their convenience. In addition, the company must provide monthly reports on operational costs. The court added:
“BAM maintains sufficient U.S. dollars on its platform to honor all expected customer fiat withdrawal requests, as estimated based on historical withdrawals, during the period in which BAM will invest customer funds; and (iii) BAM amends its terms of use and provides notice to customers in accordance with BAM’s motion.”
Binance’s Legal Issues
This isn’t the first time Binance has found itself in trouble with the law, though. In fact, the company has been under legal scrutiny for years now. Not just in the United States, but around the world as well.
For example, the company pleaded guilty to criminal charges last year and agreed to pay $4.3 billion to the U.S. Department of Justice. Changpeng Zhao resignation from the position of CEO, with a prison sentence.
Source: X
In addition, Canada was fined Binance $4.4 million for money laundering after failing to provide receipts for transactions over $10,000 on 5,902 occasions. Similarly, a Binance executive was arrested in Nigeria in May, and a court ruled that he would face criminal prosecution.
As expected, Binance The legal issues have had a significant impact on the company’s operations and its investors. For example, its persistent non-compliance with the rules has resulted in the company’s lack of access to various markets, various restrictions on its operations, and a reduced willingness of financial institutions and governments to engage or partner.
Investors also face negative consequences, such as increased KYC requirements to complete transactions, disruptions in withdrawals, and increased scrutiny. Increased scrutiny by regulators undermines the primary purpose of decentralized market systems and increases government-imposed restrictions on systems set up to avoid excessive government bureaucracies.