Former CEOs of Binance.US reveal relationship between Binance.US and Binance
Ex-CEOs of Binance.US reveal Binance.US and Binance relationship.
Source: cryptoslate; Translation: Blocking0xxz
On June 5, 2023, the U.S. Securities and Exchange Commission (SEC) charged Binance and Changpeng Zhao with violating multiple U.S. laws, some of the major allegations include Binance.US being an unregistered exchange and illegally soliciting U.S. investors to purchase, sell, and trade crypto asset securities; Binance.US and Binance.com have close relationships with Changpeng Zhao.
The SEC’s complaint includes excerpts from testimony by Catherine Coley and Brian Brooks, the former CEOs of Binance.US, who testified to regulatory bodies, one of whom has remained silent since resigning in 2021. The testimony included their leadership of Binance.US and the main obstacles they faced in their work.
The testimony also involved Binance Holdings (operator of binance.com international platform) and its impact on Binance.US and its business, as well as the sharing of technology and resources between the two.
Binance.US’s First CEO
Catherine Coley was the first CEO of Binance.US, serving from 2019 to 2021, and was responsible for the company’s initial launch in the United States.
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Her sudden departure and subsequent silence led many to speculate about what happened during her tenure as CEO and why she left. Excerpts from her testimony in the SEC filing shed light on her experiences.
Coley told the SEC that Binance.US relied heavily on resources and employees from Binance.com in the early days of its launch, with the platform’s code entirely written by engineers based in Shanghai. She said that the fact that much of the code was written in Chinese ultimately became the “main pain point” for making Binance.US independent of its international entity, Binance.com. She added that recruiting American and Western engineers to handle code work was challenging despite being bilingual.
As a result, she said she focused on areas where independence could be achieved quickly, such as customer support.
The excerpt does not mention the reason for her departure or her current whereabouts.
Coley also confirmed that during her tenure at Binance.US, the company used the same matching engine as Binance.com, and she did not recall Binance.US signing a service-level agreement before opening accounts for U.S. users in September 2019.
Brooks told the SEC that Binance.US has a team of about 50 engineers in Shanghai. He said they were initially part of Binance.com but were “separated out” into Binance.US in 2019. He understood that they operated in China under an entity called “Boran,” which was actually a unit of Binance.US in China.
Brooks said that Binance.US uses an authorized matching engine, and Binance.com does not directly control the platform through technology.
CZ is an economic counterparty
Brooks became CEO after Coley’s departure and held the position for about four months. He resigned in August 2021, citing “strategic differences.”
Brooks said he quickly realized he wasn’t the CEO he thought he would be because many of the changes he proposed to address issues at Binance.US were suddenly “rejected” after months of work.
“At a certain point, it became clear to me that CZ was the CEO of BAM Trading, not me,” he said.
Brooks also said that Binance.US received $10 million in initial funding from CZ when it launched because no company can launch without funding. He likened it to Hewlett & Blockingckard in the early days of funding their garage, but according to Brooks, the existence of this funding is a “problem.”
“This suggests the company is actually heavily reliant on CZ, who is not only a controlling person, but also an economic counterparty,” he said.