Binance Secures Approval To Invest US Customer Fiat Funds In US T-Bills, BNB Price Surges

Binance has received court approval allowing it to invest customer fiat funds into US Treasury Bills (T-Bills) after a year of heightened scrutiny of Binance’s operations in the United States. The decision has resulted in a notable price recovery for the exchange’s native token, Binance Coin (BNB), pushing it toward the $600 level. 

A court filing reveals that BAM Trading Services and BAM Management US Holdings, collectively known as BAM, filed a motion seeking relief from a consent order. The court, upon consideration of the motion, granted the requested relief. 

As a result, Binance’s US subsidiary, BAM, is now authorized to hire third-party investment advisors to manage corporate assets, paving the way for BAM to invest client fiat funds in US Treasury Bills.

Under the court-approved arrangement, BAM can invest certain customer fiat funds, currently held at BitGo, in US Treasury bills on a rolling four-week basis. However, to ensure compliance, BAM is prohibited from involving any third parties, including Binance Entities, in these investments. 

Notably, BAM must maintain sufficient USD liquidity on its platform to honor customer fiat withdrawal requests during the investment period. Additionally, BAM is required to amend its terms of use and provide appropriate notice to customers, aligning with the authorized investment activities.

Interestingly, as part of the court’s decision, BAM is now permitted to custody assets with and transfer assets to wallets provided by non-affiliated third-party custodians located in the United States. 

To maintain control over customer assets, BAM Trading officers and employees based in the United States will solely direct and manage wallets’ private and administrative keys, as required by the court. 

All transfers and withdrawals will require approval from both BAM Trading and the respective third-party custodian. Importantly, the Binance Entities will not have possession, custody, or control over any assets held in wallets provided by the third-party custodians.

The court approval comes after Binance’s agreement in November to pay a settlement of $4.3 billion to the US government. This settlement included a forfeiture of $2.5 billion and a fine of $1.8 billion. 

As part of the agreement, the former CEO, Changpeng Zhao (CZ), faced charges of violating the Bank Secrecy Act and agreed to step down from his position. CZ is currently serving a four-month sentence. 

Currently trading at $597, BNB’s price has risen over 5% on the news, after dropping as low as $455 on July 5. However, over the past two weeks, the token has seen significant gains in line with the overall market recovery. 

In the seven- and fourteen-day time frames, BNB is up 12% and 20% respectively, coupled with a 47% increase in trading volume over the past few days to $1 billion, according to CoinGecko data. Despite this, the token is still down 17% from its all-time high of $717 set on June 6th. 

Adding to the bullish momentum, BNB has surpassed the 200-day exponential moving average (EMA), which is marked by the yellow line below the current price on the BNB/USD daily chart below. 

Whenever the token trades above this key indicator, further price appreciation follows as the line is a notable support for its price. Nonetheless, BNB will encounter resistance walls at the $610, $633, and $675 levels in the event of a continuation of the current price recovery. 

Featured image from DALL-E, chart from TradingView.com