Summary of evidence related to the SEC’s lawsuit against Binance

Evidence summary for SEC's lawsuit against Binance

CEHV partner Adam Cochran tweeted a summary of the evidence related to the Securities and Exchange Commission’s (SEC) lawsuit against Binance, including chat records between Sam Lin (former compliance officer of Binance) and Alvin (former BD executive), as well as translated audio recordings of CZ.

First, there was a conversation about equity dividends, in which the compliance officer Sam Lin discussed the risks of holding BNB and advised Alvin to sell his BNB bonus for USDT. Secondly, regarding compliance, Sam pointed out that he felt the risk-reward balance was off and if he were the COO, he wouldn’t feel comfortable signing OFAC compliance content. Sam mentioned that Wei Zhou (CFO) asked him to take on the CCO role and provide double pay, but he refused. In addition, he mentioned Wei and CZ’s confusion as to why people do not want to sign OFAC reports and “know exactly what happened.” Sam also stated, “We can’t be clean,” and “I haven’t seen anything that proves we’re clean.” They discussed how CS teaches people to avoid procedures and how business priorities can replace any compliance training, while BNB’s strategy is to “live for two years and then roll out.”

The SEC also presented a translated recording of CZ, specifically mentioning the 2019 ban on US users and how they should gradually allow US users to use foreign KYC and ignore IP addresses while slowing down the release of news. In addition, during the launch of Binance US, an internal conversation revealed that a Binance executive talked about “opening a door” for US users by purchasing KYC and VPN.

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Next is a very bad document, in which Sam Lin told someone that entities could register through US exchanges but trade through .com’s special settings, and “CZ will definitely agree,” “we always have a way to solve the whale problem,” and “this is the nature of our business.” The SEC will also submit detailed requests outlining funding issues, such as many Binance US withdrawals coming from Binance International.

Reference: https://twitter.com/adamscochran/status/1666473028610408450

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