Binance.US has been under investigation by the Securities and Exchange Commission (SEC) since last year. Recently, the regulatory body filed a complaint against the cryptocurrency exchange, which included testimony from two former CEOs of the company, Catherine Coley and Brian Brooks. The filings give insight into the challenges faced by the executives while leading Binance.US and the influence of Binance Holdings on its operations.
Binance.US Dependence on Binance.com
Catherine Coley was the first CEO of Binance.US and oversaw the company’s launch in the US from 2019 to 2021. In her testimony to the SEC, she revealed that Binance.US relied heavily on Binance.com’s resources and staff during its initial launch. The code for the platform was written entirely by engineers based in Shanghai, which eventually became a “major pain point” in making Binance.US independent from its international counterpart. The codebase was written in Chinese, making it difficult to bring on US and Western engineers despite their bilingual proficiency. As a result, Coley focused on areas that could quickly become independent, such as customer support.
Coley’s testimony also confirmed that Binance.US used the same matching engine as Binance.com during her tenure. However, she did not recall signing Service Level Agreements for Binance.US until January 2020, months after it began opening accounts for US users in September 2019.
Brian Brooks’ Experience at Binance.US
Brian Brooks succeeded Catherine Coley as CEO of Binance.US. In his testimony, he revealed that Binance.US had a team of roughly 50 engineers based in Shanghai, who had initially been part of Binance.com but were “hived off” to Binance.US after the separation in 2019. They operated in China under an entity called Boran, which was essentially Binance.US’ unit in the country.
Brooks also confirmed that Binance.US used the matching engine under a license and that Binance.com was not directly controlling the platform through the tech. However, he noted that Binance founder Changpeng Zhao (CZ) gave Binance.US an initial fund of $10 million when it launched, which suggested that the company was heavily dependent on CZ, not just as a control person but also as an economic counterparty. Brooks stepped down from his position as CEO in August 2021, citing “differences over strategic direction.”
The SEC’s complaint against Binance.US sheds light on the challenges faced by the company’s former CEOs and the influence of Binance Holdings on its operations. The testimony given by Catherine Coley and Brian Brooks highlights the extent of Binance.US’s dependence on Binance.com’s resources and staff during its initial launch and the difficulties faced in making the platform independent. The filings also reveal the role played by Binance founder CZ in funding Binance.US and the challenges faced by Brooks in implementing changes to fix the issues at the company.