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Binance Executives Lawyer Up Amid CFTC Lawsuit

Coley assisted in the development of Binance’s US affiliate, Binance.US, in 2019 but left two years later. According to insiders close to her departure, the former Wall Street trader quit Binance in 2021 due to disagreements with Binance CEO Changpeng Zhao about Binance.US governance. Coley, who was once a frequent social media poster, has failed to make any public comments since her departure in 2021.

Coley’s legal counsel is a partner at Sullivan & Cromwell, the law firm that is representing Binance rival FTX in its Delaware bankruptcy case. Coley’s recruitment of McDonald follows the U.S. The Commodities Futures Trading Commission sued the exchange and its CEO for advertising its derivatives trading desk to “VIP” U.S. trading businesses that were not registered with the regulator. The CFTC also accused the exchange of having a lax compliance program.

The CFTC began investigating Binance in 2021 for alleged illegal trading, which subsequently transformed into insider trading claims. The government claimed in the recent complaint that 300 internal accounts are exempt from internal procedures barring insider trading.

Beginning in May 2021, the U.S. The Department of Justice announced that it was looking into Binance’s alleged tax evasion and compliance with KYC/AML laws. Attorneys representing the exchange began negotiating with prosecutors in December, who were considering harsh action against the exchange.

The Securities and Exchange Commission of the United States has also asked for information on how Binance.US, a spot-trading platform aimed at American users, is related to its global affiliate.

The current CFTC charges that Binance reportedly exempts 300 accounts from insider trading restrictions mirror a trend of the exchange preserving its corporate interests while presenting a charitable front.

Following the demise of FTX, he said that Binance would build a $1 billion recovery fund to assist failing crypto businesses, emphasizing that all fund activities would be public.

Nevertheless, earlier this month, the exchange transferred about $1 billion of the fund’s BUSD holdings into a corporate wallet. As US officials ordered BUSD issuer Paxos to stop minting the coin, it did not define how it would convert the funds into Bitcoin, Ether, and BNB.

“We will have monies available as needed,” a spokeswoman told Fortune, “but they will be in our corporate wallets rather than the IRI wallet.”

Furthermore, in early January, reports appeared that so-called B-tokens, which are BNB Chain copies of assets that consumers deposit, were not adequately collateralized.

Binance is also said to have combined client and business cash in a single wallet. It eventually recognized its mistake and stated that it will only mint B-tokens if the consumer wallet contained the necessary collateral.


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