In a significant move by Gary Gensler’s Securities and Exchange Commission (SEC), a lawsuit has been filed against Binance, one of the world’s largest cryptocurrency exchanges. The lawsuit alleges that Binance has been involved in the sale of unregistered securities and other shady practices. A surprising figure has emerged as a key player in this legal battle – Catherine Coley, the former CEO of Binance.US.

Vanishing Act

In 2021, Catherine Coley, the former CEO of Binance.US, seemingly vanished from the public eye, leaving many to wonder about her sudden absence. Speculation grew rampant, with rumors suggesting that she had been deliberately silenced or “vanished.” However, Coley has now reemerged, making a dramatic comeback as a key witness in the SEC lawsuit against Binance. Her unexpected return has sparked intense interest and speculation about the insights she may provide in this landmark legal battle.

Catherine Coley’s Background

Catherine Coley served as the inaugural CEO of Binance.US, the American affiliate of the global cryptocurrency exchange. Prior to her role at Binance.US, Coley worked as a Foreign Exchange Advisor at Silicon Valley Bank from 2016 to 2017. She later joined Ripple as the Head of XRP Institutional Liquidity, holding the position until 2019 when she joined Binance. She is also listed on the World Economic Forum website. Her experience in the cryptocurrency industry makes her testimony significant in the ongoing legal proceedings.

Leaked Chat Logs

Recently, leaked chat logs between Catherine Coley and Binance OTC trader Emma Shi surfaced on Twitter, adding fuel to the fire. In these conversations, Coley expressed her concern, stating,

“from where I sit, it just looks like magical money appears out of nowhere.”

These messages imply potential irregularities or questionable practices within the organization.

Coley’s Damning Allegations Against CZ and Binance

Catherine Coley’s testimony, identified in the SEC lawsuit as “BAM CEO A,” provides crucial insights into Binance’s operations. Some key points from the lawsuit and testimony include:

1. Reporting and Direction: Coley reported to and received directives from Changpeng Zhao (known as CZ), the CEO of Binance, and the Binance Chief Financial Officer (CFO) during her tenure at Binance.US.
2. Control and Participation: It is alleged that Zhao and Binance exerted significant control and actively participated in the operations of both the Binance.US Platform and BAM Trading.
3. Terms of Use Update: Binance’s press release coincided with updates to the Binance.com Platform’s Terms of Use, which seemingly prohibited U.S. investors. However, the connection between the two platforms was not explicitly disclosed.
4. Involvement in Operations: Zhao and Binance were reportedly involved in the day-to-day operations of the Binance.US Platform, including trading services and decision-making processes.
5. Crypto Asset Selection: It is alleged that Zhao and Binance directed the selection of cryptocurrencies available for trading on the Binance.US Platform, even if it posed legal risks.
6. Financial Control: Binance exercised control over BAM Trading’s bank accounts, finances, and routine business expenditures, requiring Zhao’s approval for significant expenditures.
7. Offshore Data Control: Binance held and controlled BAM Trading’s data offshore, restricting BAM Trading employees’ access to certain trading data without Zhao’s personal approval.
8. Custody Arrangement: Zhao and Binance had control over the custody of crypto assets deposited, held, traded, and accrued on the Binance.US Platform, with limited oversight or control given to BAM Trading employees.
9. Customer Risk: The custody arrangement and lack of controls allegedly posed risks to Binance.US Platform customers, as they did not have any formal agreement regarding the custody of their crypto assets with either BAM Trading or Binance.

Catherine Coley’s testimony brings forth serious allegations against Binance and sheds light on the inner workings of a such a large organization that many are critical of. As the lawsuit unfolds, one thing is certain: 2023 will bring to light the truth.