The SEC’s complaint against Binance.US includes excerpts from testimony given to the regulator by two of the firm’s former CEOs, one of whom has been radio silent since stepping down in 2021.
The testimony also touched on the impact Binance Holdings – which runs the international Binance.com platform – had on Binance.US and its operations as well as the sharing of technology and resources between the two.
First CEO of Binance.US
Catherine Coley was the first CEO of Binance.US and held the role between 2019 and 2021 – overseeing the company’s initial launch in the US
Her sudden departure and subsequent silence has led many to speculate as to what happened during her time as CEO and why she left. Portions of her testimony in an SEC filing shed some light on her experience.
Coley told the SEC that Binance.US relied heavily on Binance.com’s resources and staff for its launch, with the platform’s code being written entirely by Shanghai-based engineers.
She said that this eventually became a “major pain point” in making Binance.US independent from its international counterpart because a lot of the codebase was written in Chinese. He noted that it was challenging to get US and Western engineers to work on the code, despite bilingual proficiency.
As such, she said she focuses on areas that can quickly become independent, such as customer support.
The excerpt did not include the reason behind his departure or his current whereabouts.
Coley also confirmed that Binance.US used the same matching engine as Binance.com during his time there and that he does not recall signing a service level agreement for Binance.US until January 2020, months later. Started opening accounts for US users in September 2019. ,
Brooks told the SEC that Binance.US had a team of about 50 engineers based in Shanghai. He added that they were initially part of Binance.com, but were “left” to Binance.US following the 2019 split. He worked in China under an entity called Boron, which was essentially Binance.US’ unit in the country, got it.
Brooks said that Binance.US used the matching engine under license and that Binance.com was not directly controlling the platform through the technology.
CZ was an economic counterparty
Brooks became CEO after Coley’s departure and held the role for approximately four months. He stepped down in August 2021, saying it was due to “differences over strategic direction”.
Brooks said he joined the company but soon realized he was no longer the CEO after several changes were proposed to fix issues at Binance. America was suddenly “rejected” despite months of work.
“What – at a certain point it became clear to me that CZ was the CEO of BAM Trading, not me.”
Brooks also said that CZ provided Binance.US with $10 million in seed funding at the time of its launch, as a company cannot be launched without money. He compared this to Hewlett & Packard funding themselves in the garage days, but according to Brooks the availability of funds was a “problem”.
“It has been suggested that the company was, in fact, heavily dependent on CZ, not only as a control person, but also as an economic counterparty.”