In the latest court filing by the US Securities and Exchange Commission (SEC) against Binance, the Switzerland-registered crypto-asset trading company, Sigma Chain, is under scrutiny. The filing alleges that Changpeng Zhao (CZ), the CEO of Binance, is the actual owner of Sigma Chain, with multiple Binance employees operating the firm.
The filing also claims that Binance’s back office manager holds a dual role, serving as Sigma Chain’s president and having signatory rights over the bank accounts of BAM Trading. Sigma Chain is portrayed as an active trader on two Binance platforms, self-proclaiming itself as a “major market maker for the Binance exchange.”
Following the launch of Binance.US, CZ reportedly instructed Sigma Chain to become one of its initial market makers. Furthermore, since the introduction of over-the-counter (OTC) and One-Click Buy/Sell (OCBS) services on the Binance.US platform, Sigma Chain has been the counterparty for platform customers, sometimes serving as the sole counterparty.
This development adds to the complexity of the ongoing legal scenario between Binance and the SEC, with potential ramifications for the operation of crypto exchanges and the roles played by affiliated entities. It remains to be seen how this case will unfold in court.