While Unregistered, Binance Offered COTI for Sale as a Security

FACTS

VIII. THE CRYPTO ASSETS TRADED ON THE BINANCE.COM PLATFORM AND BINANCE.US PLATFORM INCLUDE ASSETS THAT WERE OFFERED AND SOLD AS SECURITIES.

J. COTI

496. “COTI” is the native token of the Coti blockchain and ecosystem. Coti is company that purports to provide a digital infrastructure for payments, co-founded by Samuel Falkon and David Assaraf. Shahaf Bar-Geffen is Coti’s CEO. The Coti website, www.coti.io, is operated by Coti (BVI) Limited, a company incorporated and registered in the British Virgin Islands.

497. On June 4, 2019 Coti conducted an IEO on a crypto asset trading platform for approximately 46 million COTI, raising approximately $3 million. Coti has a maximum supply of two billion COTI.

498. COTI has been available for buying, selling, and trading on the Binance.com Platform since February 2020, and the Binance.US Platform since April 2022.

499. The information Coti publicly disseminated has led COTI holders, including those who have purchase COTI since February 2020, reasonably to view COTI as an investment in and to expect to profit from Coti’s efforts to grow the Coti protocol, which, in turn, would increase demand for and value of COTI.

500. For example, in a May 28, 2019 Medium post Coti stated that the purpose of the upcoming IEO was “to ensure an effective launch,” and that the IEO “enable[s] us to amplify our community base and to generate greater visibility and liquidity measures.”

501. In that post, Coti also stated that the Coti team was allocated 15% of the total COTI supply and advisors were allocated 10% of the total COTI supply. Coti further noted that “[t]eam tokens have a minimum six-month lockup and are released over a 24-month period” and that “[a]dvisor tokens are locked for a 6-36-month period.”

502. Moreover, the webpage announcing the June 4, 2019 IEO disclosed a so-called “private” sale allocation of 10.01% of the total COTI supply at $0.08 per COTI, and a so-called “seed” sale allocation of 2.87% of the total COTI supply at $0.06 per COTI.

503. On that date Coti also published a Medium post entitled, “COTI’s IEO [] creates buying frenzy,” touting COTI’s “trading volume hit $1M USD within 30 minutes of launching,” and that COTI’s “price sprinted over 10 times the opening value twice and stalled at a peak appreciation of x18.”

504. The “Purchase Agreement” for the IEO stated that “proceeds from the Token Sale will be deployed to fund the development of the COTI Project, for the development of the COTI technology and the COTI eco-system.”

505. Coti posted a number of “Meet the COTI Team” Medium blog posts, including one from April 2022 highlighting its COO. In the post, the COO stated: “COTI has one of the best (probably THE best) teams in the world”; that “we are continuing to build this special DNA and culture of excellence”; and that his aim was to “keep improving current processes and to bring the most optimized communication tools into all of COTI’s different departments, which [he] believed is bound to make it more successful!”

506. Another Coti “Meet the COTI Team” post in October 2022 highlighted Coti’s Talent Acquisition Manager. The Talent Acquisition Manager stated that since she started at Coti, she had “managed to double the amount of employees from the entire range of departments like R&D, Marketing, research and more,” and that because “[t]he Crypto industry is a fiercely competitive one … every company needs the best talents for them to stand out in the industry.”

507. In public statements on social media, as well as in Medium posts and posts on its website, Coti has described the efforts that this team and team members made and would continue to make to develop the Coti blockchain and attract users to the technology.

508. For example, in a January 2023 Medium post outlining its plans for 2023 and beyond, Coti claimed that it is “uniquely optimized to solve challenges around payments,” stated that it will “continue to gain more traction with more enterprises,” and said that it “plan[s] on expanding.” It also stated that its “ecosystem of [COTI] holders will continue to benefit from the network’s success by engaging with our Treasury app” with “new and innovative features geared toward the growth of value captured.”

509. Coti also states on its website, “COTI is an all-in-one company – protocol and commercial development are both in-house. COTI offers a turn-key solution for enterprises which can be white labeled with products.”