Navigating Regulatory Purgatory: How CZ's Binance and BAM Trading Solicited Investors by@secagainsttheworld
Navigating Regulatory Purgatory: How CZ's Binance and BAM Trading Solicited Investors
by SEC vs. the WorldSeptember 19th, 2023
Too Long; Didn't Read
BAM Trading and Binance, led by Changpeng Zhao, actively market their services to U.S. customers. They provide exchange and brokerage functions for cryptocurrency assets and employ various strategies like social media marketing, incentives, and promotions to attract and engage U.S. investors. Zhao himself plays a significant role in promoting the Binance.US Platform through social media and other channels, facilitating access for U.S. customers.
SEC v. Binance Court Filing, retrieved on June 5, 2023 is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This is part 28 of 69.
FACTS
V. UNDER ZHAO’S CONTROL, BAM TRADING AND BINANCE PROVIDE EXCHANGE AND CLEARING AGENCY FUNCTIONS TO U.S. CUSTOMERS, AND BAM TRADING ALSO PROVIDES BROKERAGE SERVICES TO U.S. CUSTOMERS
A. BAM Trading and Binance, Under Zhao’s Control, Solicit Investors.
212. To solicit investors to open accounts and trade crypto asset securities on the Binance.US Platform, BAM Trading actively markets its various services in the United States, including through its website, blog, and various social media platforms.
213. BAM Trading publicizes when the Binance.US Platform is newly available to customers in a different U.S. state or territory. It also markets new and available products and services, such as the OTC Desk, Convert Trading, and OCBS Services described below, including through content on its blog and “how-to” tutorials on accessing and using features of the Binance.US Platform.
214. BAM Trading also consistently touts certain metrics of the Binance.US Platform, such as daily trading volumes and each crypto asset and trading pair available for spot trading.
215. BAM Trading also offers investor incentives and promotions, such as new user sign-up bonuses, zero (or low) trading fees for certain crypto assets, and trading fee discounts.
216. BAM Trading’s solicitation of customers has occurred at Zhao’s direction. In addition, Zhao has regularly marketed the Binance.US Platform services and the crypto asset securities available for trading on the Binance.US Platform. For example, through his Twitter account, Zhao has promoted the launch of new products offered on the Binance.US Platform or when the platform begins offering services to investors in a new U.S. state or territory.
217. Binance, under Zhao’s direction, has also marketed and solicited customers for the Binance.US Platform, particularly when the Binance.com Platform purported to prohibit U.S. investors after September 2019. For example, Binance.com’s blog promoted the Binance.US Platform and its news and developments, referring to the Binance.US Platform on at least one occasion as “our fiat-to-crypto exchange Binance.US” (emphasis added). In addition, if a U.S. customer tries to access the Binance.com Platform, a pop-up window appears, stating in relevant part, “If you are in the United States or select U.S. territories, Binance.us is a U.S. regulated platform where you can buy, trade, convert, and stake crypto with low fees.” The pop-up window provides a button that allows a customer to access the Binance.US Platform directly.
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This court case 1:23-cv-01599 retrieved on September 6, 2023, from docdroid.net is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.
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