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 23 of 69.
FACTS
IV. ZHAO AND BINANCE ESTABLISHED THE BINANCE.US PLATFORM WHILE MAINTAINING SUBSTANTIAL INVOLVEMENT AND CONTROL OF ITS OPERATIONS.
A. Zhao and Binance Created U.S. Entities BAM Management and BAM Trading and Developed the Binance.US Platform.
143. In February 2019, Zhao and Binance directed the creation of two U.S. corporate entities that would launch the Binance.US Platform: BAM Management and BAM Trading.
144. Since inception, Zhao has been BAM Management’s beneficial owner, directly or indirectly owning between as much as 100 percent and approximately 81 percent of its equity.
145. BAM Trading is a wholly-owned subsidiary of BAM Management. BAM Trading is the public facing entity that operates the Binance.US Platform. As further set forth below, BAM Trading operates the Binance.US Platform as part of a group of persons with Binance, which plays a significant and integral role in the operation of the platform.
146. In June 2019, Zhao provided $500,000 in initial funding for the Binance.US Platform, and later he periodically injected additional funds, including through his entity Merit Peak. As of July 2020, Zhao had contributed over $16 million to finance the Binance.US Platform’s operations, money that was critical for the Binance.US Platform’s ongoing expenses.
147. At its inception, Zhao controlled BAM Trading’s business, which was largely operated by Binance employees under Zhao’s direction.
148. At Zhao’s direction, the Binance Consultant was hired to provide advice on “regulatory compliance” for the platform. The Binance Consultant had substantial involvement in the development and operation of the Binance.US Platform until at least the fall of 2019, primarily assisting in implementing the Tai Chi Plan he had proposed to Zhao.
149. Zhao, the Binance Consultant, and numerous Binance personnel working at Zhao’s direction developed and planned the launch of the Binance.US Platform. They designed and implemented all aspects of platform operations, including managing customer access, arranging fiat services with U.S. banks, establishing crypto asset wallets, developing a trading engine, and developing the platform’s trade clearing and settlement functions.
150. Zhao was also involved in the hiring of BAM Trading’s first Chief Executive Officer (“BAM CEO A”), who began her tenure in June 2019. At all times prior to her tenure with BAM Trading, which ended in or around March 2021, BAM CEO A reported to and was directed by Zhao and the Binance CFO. During this period, Zhao, BAM CEO A, and the Binance CFO constituted BAM Trading’s Board of Directors.
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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.
