Binance CEO Summoned by US Court Amid SEC Lawsuit: Analyzing the Implications and Conflicts

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Summons for crypto exchange CEO in court, SEC lawsuit backdrop, mysterious ex-CEO testimony, contrasting independence desires, tension-filled court atmosphere, intricate legal document details, low-light, baroque artistic style, dramatic mood, undercurrents of conflicts and unfolding investigations.

The United States District Court in Washington, D.C. recently issued a summons for Binance CEO Changpeng Zhao on June 7, just two days after the Securities and Exchange Commission (SEC) formally sued the exchange for alleged unregistered securities operations. While details are currently limited, the summons viewed did not seem to have been marked as served, and immediate requests for information were not returned by the SEC or Binance.

Once served, according to the document, Binance and its CEO will have 21 days to respond. Failure to respond will result in judgment by default being entered against them for the relief demanded in the complaint. This is a developing story, and further information will be added as it becomes available.

In related news, the former Binance.US CEO Catherine Coley, who is transparently known as “BAM CEO A” in the suit against Binance filed by the SEC on June 5, has kept a low profile since her departure. However, she provided testimony to the SEC in 2022 when it investigated the company for insider trading. That testimony has resurfaced as an exhibit in the SEC’s new case against the cryptocurrency exchange. Coley’s 2022 testimony was apparently quite lengthy, as the selections that constitute Exhibit 86 in the June 6 case have page numbers that range from 135 to 336. Those passages mainly concern the separation of Binance and Binance.US, which was the subject of major allegations in the SEC suit.

Coley was the Binance.US CEO from its founding in 2019 until her resignation in 2021. As recounted in the SEC suit, Binance CEO Changpeng Zhao, also known as “CZ,” was involved in Coley’s hiring but she quickly became frustrated with Binance.US’ lack of independence. The service-level agreements between Binance and Binance.US were a Master Services Agreement, a Wallet Custody Agreement, a Software License Agreement, and a Trademark Agreement.

Notably, the Wallet Custody Agreement grated Coley, as she testified in 2022 that she wanted the U.S. to have control over the custody of tokens. Furthermore, trading data was covered by the agreements, and she expressed her desire to have custody of the data and the ability to interact with the raw data in real-time. The suit also cites Coley’s internal communications in addition to her 2022 testimony, with references to Binance.US’ efforts to receive more independence as “Project 1776” and a blunt interaction about wash trading.

Source: Cointelegraph

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