In court records made public this week, Brian Brooks, the former CEO of Binance.US, revealed the details of his separation from the exchange. During his interview with the US Securities and Exchange Commission (SEC) in December 2021, Brooks clarified Changpeng Zhao, CEO of Binance, and his responsibilities at the US-based exchange.
According to Brooks’ statement in the court filings, CZ, not she, was the CEO of BAM Trading at a given moment. That is what eventually became evident. A recent regulatory action against Binance centers on BAM Trading and BAM Management, who run Binance.US.
Brooks left Binance.US shortly after taking on the position of CEO, which was for around four months. Brooks held the position of Acting Comptroller of the Currency prior to his time at the exchange. This regulatory organization is part of the US Treasury and is in charge of monitoring national banks and federal savings associations among other institutions.
Brooks underlined the contrast between management, which is the CEO’s role, and governance, which is the board’s jurisdiction, during his 2021 interview with the SEC. “All of the things that we had previously agreed and had worked on for 80 days were suddenly repudiated with no further discussion,” Brooks said of being frequently “overruled” when attempting to address certain issues. “On that day, I realized, huh, I’m not actually the one running this company, and the mission that I believe I signed up for isn’t the mission.”
The allegations from Brooks follow the SEC’s accusations against Binance and Changpeng Zhao, accusing them of exhibiting a “blatant disregard of the federal securities laws” and bringing a total of 13 counts against them. Zhao and Binance are accused by the SEC of setting up BAM Management and BAM Trading as part of a sophisticated strategy to get around US rules by pretending that the Binance.US platform functioned independently while really having a significant amount of influence over the US firm.
The legal action taken against Binance and its CEO serves as a reminder of the increased regulatory scrutiny and difficulties cryptocurrency exchanges must navigate. The resolution of these charges will have a big impact on how large crypto platforms operate in the future and how they handle compliance, which highlights the need for more openness and respect to rules in the sector.
