encryption probes Investigation The United States Treasury General Account (TGA) drew a parallel between the actions of the US Treasury and those of Binance when it sold $1 billion of its Industry Recovery Fund in the first quarter of 2023.
Binance says they purchased liquidity in the first quarter of 2023
In the first quarter of 2023, there were suspicions that Binance, the world’s largest cryptocurrency in terms of trading volume and number of clients, was supporting liquidity in the cryptocurrency market.
Speculation of possible market manipulation by Binance gained more traction when Changpeng Zhao, CEO of Binance, said: converted An astounding $1 billion worth of Binance USD (BUSD) from the Binance Industry Fund into Bitcoin (BTC), Ethereum (ETH) and Binance Coin (BNB).
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This move artificially injected buying pressure into the market, forcing the bitcoin price higher beyond $22,500. Ethereum also rose to reclaim the $1,600 mark, and BNB surged more than 10%, reaching a two-week high above $300.
Investigators claim that the decision to convert the $1 billion industry recovery fund into other coins was a move possibly to inject liquidity into the cryptocurrency market.
At the time, banks were under pressure, and cryptocurrency-supporting institutions such as Silicon Valley Bank (SVB) faced a crisis, which affected USDC, causing it to unpeg for a short time.
Although there is no strong link between Binance’s move and market manipulation, investigators are now turning their eyes to the US Treasury’s (TGA) public account and how quickly it is declining.
US Treasury Aping Binance?
With banks under pressure, crypto investigators are monitoring the TGA account. It serves as the bank account through which the United States government manages the national debt and pays the Treasury revenue.
Observers noted that the Treasury Department has been supporting liquidity in the US economy, similar to what Binance reported in Q1 2023, by leveraging this account since interest rates started to rise.
In 2022, the account held about $1 trillion, but its balance has steadily declined, with the current balance standing at about $38 billion. This rapid depletion is because the Treasury needs to keep the government running.
With the TGA down, Treasury Secretary Janet Yellen, issued Warning, which states that without congressional action to raise or suspend the $31.4 trillion debt ceiling, the US government could default on a payment as early as June 1.
Yellen wrote a letter to Congress, highlighting the urgency of action and the potential consequences of inaction.
And the Treasury predicts that without increasing the debt limit, the government will only be able to meet its fiscal obligations until June 1, leaving just 10 days for negotiators and lawmakers to resolve. with the approval of policy makers Lifts The debt ceiling, the government will issue bonds, raise yields and put pressure on bitcoin prices in the coming days.
Feature image from Canva, chart from TradingView