Decrypt’s Art, Fashion, and Entertainment Hub.
Ex-Binance US CEO Catherine Coley has hired an attorney to advise her in the Commodities Futures Trading Commission’s lawsuit against Binance, an anonymous source told Reuters.
Coley is said to have hired Sullivan & Cromwell partner James McDonald, a former director of enforcement at the CFTC until 2020. Sullivan & Cromwell did not immediately respond to a request for comment from Decrypt on Thursday.
The CFTC filed its lawsuit against Binance on Monday, a move that the crypto exchange called “unexpected and disappointing.”
The lawsuit alleges that Binance committed multiple trading derivatives violations, including not being properly registered to offer derivatives to U.S. clients, not adequately supervising activity on its exchange, insufficient anti-money laundering (AML) and know-your-customer (KYC) controls, knowingly evading or helping U.S. clients evade regulators, and perhaps most damning: trading against its own customers.
Binance has said for years that Binance US, an affiliate launched by Binance and BAM Trading in 2019, was set up as a separate company for U.S.-based customers. And Coley, who was CEO at Binance US until April 2021, was very visible in the space. In fact, she appeared on Bloomberg to applaud Coinbase going public just a few days before it was announced she would be replaced by Brian Brooks as CEO.
Brooks then made his own hasty exit from Binance just three months after taking over. It was later reported in The New York Times that he left over a spat with Zhao over keeping Binance US independent from Binance.com.
If McDonald is advising Coley on the new CFTC lawsuit, it won’t be the first time he’s working with her as a client.
He’s already represented Coley in another case, Ryan Cox v. CoinMarketCap. In a September 2021 complaint, Cox alleged that the real-time crypto market data website, which was acquired by Binance in 2020, unfairly suppressed the ranking of a token, HEX, and overvalued the prices of Binance USD (BUSD) and BinanceCoin (BNB).
Coley was voluntarily dismissed as a defendant in the case, which still lists BAM Trading Services and Binance.com CEO Changpeng Zhao. Cox has since appealed the dismissal and will present opening arguments in May.