(Bloomberg) -- In 2019, Catherine Coley became the first chief executive of Binance.US, a crypto exchange that shares its name with the world’s largest digital assets trading platform Binance Holdings Ltd. Two years later, she stepped down suddenly and has been little heard from or seen since.
That is, until the US Securities and Exchange Commission sued the two platforms along with its founder Changpeng “CZ” Zhao on Monday, accusing the group of commingling assets and allowing the Binance parent to manage and influence parts of the US business from afar, among other charges. Portions of testimony given by Coley to the watchdog were published as part of the SEC’s complaint, shedding some light on her experience while running the Binance.US platform.
Read more: SEC’s Binance.US Suit Alleges ‘Virtually Non-Existent’ Controls
Binance.US was launched using resources and personnel from the international platform Binance.com, Coley said in her testimony, which at the time had operations in China. It became one of several “major pain points” for Coley when trying to bring on Western and US-based engineers to work on Binance.US’s codebase, she said, because most of it had been written in Chinese.
“The data and the finance were the two most difficult ones to bring over to the US, and the data was — had a significant opacity to it,” Coley added. “And I did not get answers from CZ on why or how or what we would need to do to be able to bring the data over.”
Coley’s exit from Binance.US in April 2021 was a surprise to many, and her subsequent silence online caused some to speculate about her fate. She was replaced by Brian Brooks, a former banking regulator who lasted four months in the role before resigning. Prior to joining Binance.US, Coley spent five years with Morgan Stanley at its Hong Kong and London foreign-exchange desks.
The influence of the wider Binance international entity over its US affiliate appears to continue into the present day. Binance.US had about 100 contract workers in Shanghai in April, mostly in engineering and product roles, Bloomberg News reported at the time. Even then, progress had been slow on relocating some of the workers to North America.
Read more: Binance.US Tech Work Is Parceled to a Crew in Shanghai (1)
Brooks also gave testimony to the SEC. Discussing his time at the company, Brooks said Binance.US had relied on liquidity provided by investment funds connected to Zhao, with Zhao giving the company with an initial $10 million in funding at launch. The funds’ presence caused “a real problem,” Brooks said, because “it suggested that the company was, in fact, heavily dependent on CZ, not just as a control person but also as an economic counterparty.”
He described a situation late in his tenure where changes that Binance.US had been working on for 80 days were all “suddenly repudiated with no further discussion.” “What became clear to me at a certain point was CZ was the CEO of BAM Trading, not me,” Brooks said, referring to Binance.US’s corporate entity.
The SEC complaint didn’t provide any information on Coley’s current whereabouts.
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