DECLARATION of Sara Sisenwein by BAM MANAGEMENT US HOLDINGS INC., BAM TRADING SERVICES INC. re [40] Memorandum in Opposition filed by BAM TRADING SERVICES INC., BAM MANAGEMENT US HOLDINGS INC.. (Leblanc, Andrew)
Page 1 UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
)
)
)
)
)
)
)
Plaintiff,
v.
BINANCE HOLDINGS LIMITED,
Civil Action No. 1:23-cv-
)
BAM TRADING SERVICES, INC.,
)
BAM MANAGEMENT US HOLDINGS, INC., )
and CHANGPENG ZHAO,
)
)
Defendants.
)
DECLARATION OF SARA SISENWEIN
Pursuant to 28 U.S.C. § 1746, I hereby declare as follows:
1.
I am the Senior Director of Treasury Operations at BAM Trading Services, Inc.
(“BAM Trading”). I have held this role since August 2021. In that role, I am responsible for,
among other things, managing and maintaining BAM Trading’s banking and payment processor
relationships and the fiat currency (referred to here as “cash”) it maintains on behalf of its
customers and for its own proprietary account.
2.
I lead Treasury Operations whereby I identify new banking and payment processing
partners for BAM Trading to facilitate the movement of fiat on and off the BAM Trading platform
for the benefit of our users. Once a banking or payment processing partner is identified I work
with BAM Trading personnel to operationalize the onboarding and ongoing relationships with the
payment processor or banks. Prior to BAM Trading I was with a fintech start-up that enabled realtime payments for bill pay. I was with the company for five years. I hold a patent along with my Page 2 former co-workers from that company and many of the company’s clients were banks. Prior to my
last role I served as a senior leader for a few start-ups.
3.
As set forth below, cash held on behalf of customers by BAM Trading is safe,
secure, and available to immediate withdrawal by customers, subject to limitations imposed by
BAM Trading’s banking partners. BAM Trading holds customer cash in segregated accounts with
its payment processing partner banks that are entirely separate from BAM Trading’s own cash.
4.
Neither Changpeng Zhao (“Zhao”), BAM Trading’s ultimate beneficial owner, nor
anyone associated with Binance Holdings Limited (“BHL”) has authority to withdraw or transfer
cash held on behalf of BAM Trading’s customers or corporate cash held for BAM Trading’s own
benefit.
5.
However, the pendency of this matter—and specifically the SEC’s motion for a
temporary restraining order—has made it difficult for BAM Trading to maintain its indirect
banking relationships, impacting customers’ ability to withdraw their cash off of the BAM Trading
platform.
6.
The following describes the state of BAM Trading’s banking relationships as of the
date of this declaration. My understanding is that all of this information has already been provided
to the SEC Staff in connection with its investigation of BAM Trading.
I.
BAM TRADING
7.
BAM Trading operates a digital asset exchange in the United States.
8.
From June 2019 through the present, BAM Trading has been registered as a money
services business with the Financial Crimes Enforcement Network (“FinCen”), a bureau of the
United States Department of Treasury. Page 3 9.
Since it began operating in 2019, BAM Trading has over time obtained money
services business licenses, or otherwise been permitted to conduct business, in 43 states and the
District of Columbia, and is subject to regular examination by these jurisdictions.
10.
After completing BAM Trading’s onboarding requirements, which include Know
Your Customer processes, BAM Trading customers have historically been allowed to deposit cash
to their BAM Trading accounts using debit cards, Automated Clearinghouse (“ACH”) transfers,
or wire transfers from their bank accounts. These funds could then be used to purchase crypto
assets on the BAM Trading platform.
11.
BAM Trading customers have also historically been able to convert crypto assets
holdings in their BAM Trading accounts to cash.
12.
BAM Trading customers have also historically been able to withdraw cash from
their BAM Trading accounts to their external bank accounts using ACH transfers, or wire transfers.
13.
Since the filing of this action and the SEC’s Motion for a Temporary Restraining
Order, several of BAM Trading’s banking partners have indicated that they are no longer willing
to provide banking services to BAM Trading. It has also been difficult to identify direct or indirect
substitute banking partners. As a result, BAM Trading announced that it would cease processing
deposits or withdrawals of cash as of June 13, 2023.
II.
BAM TRADING’S BANKING RELATIONSHIPS
14.
BAM Trading processes cash for customers through partnerships with banks and
payment processors.
15.
BAM Trading held certain customer cash at Axos Bank, where it maintains separate
accounts for customer assets and corporate assets. On June 9, 2023, BAM Trading initiated the Page 4 transfer the customer cash held at Axos Bank to BitGo Trust Company Inc. (“BitGo”). I describe
our accounts at BitGo in more detail below.
a.
BAM Trading’s senior executives are the only authorized signatories on
BAM Trading’s Axos Bank accounts for both corporate and customer cash.
b.
Neither Mr. Zhao nor anyone from BHL have any ability to transfer funds
from BAM Trading’s Axos Bank accounts for both corporate and customer cash.
16.
BAM Trading also holds certain customer cash at BitGo, Nuvei US LLC (“Nuvei”),
Orum Money Movement (“Orum”), Wyre Payments Inc. (“Wyre”), and, until recently, Prime
Trust, LLC (“Prime Trust”).
a.
These entities are third-party payment processors, which are sometimes
referred to as “fintech bank partners.”
These payment processors provide various money
transmissions services and access to banking services.
b.
BAM Trading’s payment processors maintain omnibus accounts on behalf
of BAM Trading’s customers, which in turn have custodial relationships with various bank
partners. Until recently, BAM Trading maintained both customer and corporate cash at Prime
Trust.
i.
Under these arrangements, BAM Trading or a BAM Trading
customer transfers cash to the payment processor, which then transfers the cash into the payment
processor’s bank account held for the benefit of the payment processors customers.
ii.
Customer-initiated withdrawals of cash maintained by these
payment processors are automatically approved, up to specified limits set by BAM Trading or the
relevant payment processor or its banking partners. Page 5 iii.
Customer-initiated transfers above these limits, or transfers initiated
by BAM Trading for treasury-management purposes, must be approved by BAM Trading’s
“authorized account owners” or “authorized account managers” at each payment processor.
Authorized account “owners” are senior executives with BAM Trading. Authorized account
“managers” are members of the Treasury or Treasury Operations team who have access to manage
day-to-day operations of the accounts. All transfers must be approved by an authorized account
owner. At some institutions, authorized account managers have authority to initiate transfers;
however, these transactions still require the approval of an authorized account owner before they
can be processed.
iv.
Designated personnel at the respective payment processors serve as
direct signatories on the bank accounts held in the processors’ respective names. BAM Trading
does not have a direct relationship with the payment processors’ banks.
v.
Neither Mr. Zhao nor anyone from BHL have any ability to initiate
transactions by payment processors concerning funds belonging to BAM Trading or BAM Trading
customers.
c.
BitGo: BAM Trading maintains inactive cash at BitGo on behalf of
customers in their BAM Trading accounts.
i.
Members of the Treasury or Treasury Operations team are the only
authorized account owners on BAM Trading’s BitGo cash accounts.
ii.
Neither Mr. Zhao nor anyone from BHL have any ability to transfer
funds from BAM Trading’s BitGo accounts.
iii.
As noted above, BAM Trading initiated the transfer of the customer
cash held at Axos Bank to BitGo on June 9, 2023. Page 6 Orum: BAM Trading has an account with Orum that allows customers to
d.
deposit or withdraw cash using ACH transfers or wire transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Orum
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Orum accounts.
Nuvei: BAM Trading has an account with Nuvei that allows customers to
e.
deposit or withdraw cash using debit cards or ACH transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Nuvei
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Nuvei accounts.
Wyre: BAM Trading has an account with Wyre that allows customers to
f.
deposit or withdraw funds using wire transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Wyre
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Wyre accounts.
g.
Prime Trust: Until recently, BAM Trading had an account with Prime
Trust that allowed customers to deposit or withdraw cash using various protocols. BAM Trading Page 7 also maintained certain corporate cash at Prime Trust. BAM Trading has since transferred all
customer cash out of its Prime Trust account.
i.
Senior executives and members of the Treasury or Treasury
Operations team were the only authorized account owners and managers on BAM Trading’s Prime
Trust accounts.
ii.
Neither Mr. Zhao nor anyone from BHL had any ability to transfer
customer or corporate funds from BAM Trading’s Prime Trust accounts during my tenure at BAM
Trading.
iii.
BAM Trading’s June 1, 2023 letter to the SEC Staff in response to
its May 30, 2023 letter request inadvertently indicated that Mr. Zhao was a signatory on BAM
Trading’s Prime Trust accounts. 1 BAM Trading’s June 2, 2023 letter to the SEC Staff corrected
this issue and noted that Mr. Zhao was listed as an ultimate beneficial owner of BAM Trading’s
Prime Trust account, but was not an authorized signatory, authorized account owner, or authorized
account manager.
iv.
Ultimate beneficial owners are recorded as part of financial
institutions’ Know Your Customer requirements. However, ultimate beneficial owners do not
have the authority or ability to transfer or withdraw assets from an account.
v.
The SEC’s Motion for a Temporary Restraining Order incorrectly
states “documents Prime Trust produced to the SEC” suggest that Mr. Zhao “had signatory
authority over [BAM Trading’s Prime Trust] account” until May 2023. However, the cited Exhibit
A-67 correctly identifies Mr. Zhao as an ultimate beneficial owner of the Prime Trust account, not
an account signatory, account owner, or account manager. As noted above, being identified as an
I understand that this issue was the result of an inadvertent mix-up that arose during BAM Trading’s attempts
to provide a response to the SEC’s requests in the less than 48 hours demanded by the SEC Staff.
Page 8 ultimate beneficial owner did not give Mr. Zhao any ability to withdraw or transfer funds from
BAM Trading’s Prime Trust account.
III.
CONCLUSION
17.
BAM Trading maintains control over the cash deposited by its customers. Subject
to restrictions imposed by BAM Trading’s banks and payment processors, customers have the
ability to immediately withdraw any cash held in their BAM Trading accounts.
18.
No BHL employee or combination of employees has the ability or authority to
transfer or withdraw cash held on behalf of BAM Trading’s customers and I am not aware of any
instances in which BHL employees sought to move cash held on behalf BAM Trading’s customers.
19.
Further, the SEC’s motion for a temporary restraining order contains no evidence
that BHL or Mr. Zhao have exerted any authority of BAM Trading’s bank accounts since I joined
BAM Trading in August 2021.
20.
The only allegation that post-dates August 2021 is the allegation that Mr. Zhao was
listed as a signatory on BAM Trading’s Prime Trust account until at least May 2023. However,
the evidence proffered by the SEC shows that Mr. Zhao was not a signatory on that account and
was, instead, only listed as the account’s ultimate beneficial owner.
I declare under penalty of perjury under the laws of the United States of America that the foregoing
is true and correct.
Executed this 12th day of June, 2023, in Washington, District of Columbia.
/s/ Sara Sisenwein__________
Sara Sisenwein
PDF Page 1
PlainSite Cover Page
PDF Page 2
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 1 of 8
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
)
)
)
)
)
)
)
Plaintiff,
v.
BINANCE HOLDINGS LIMITED,
Civil Action No. 1:23-cv-01599
)
BAM TRADING SERVICES, INC.,
)
BAM MANAGEMENT US HOLDINGS, INC., )
and CHANGPENG ZHAO,
)
)
Defendants.
)
DECLARATION OF SARA SISENWEIN
Pursuant to 28 U.S.C. § 1746, I hereby declare as follows:
1.
I am the Senior Director of Treasury Operations at BAM Trading Services, Inc.
(“BAM Trading”). I have held this role since August 2021. In that role, I am responsible for,
among other things, managing and maintaining BAM Trading’s banking and payment processor
relationships and the fiat currency (referred to here as “cash”) it maintains on behalf of its
customers and for its own proprietary account.
2.
I lead Treasury Operations whereby I identify new banking and payment processing
partners for BAM Trading to facilitate the movement of fiat on and off the BAM Trading platform
for the benefit of our users. Once a banking or payment processing partner is identified I work
with BAM Trading personnel to operationalize the onboarding and ongoing relationships with the
payment processor or banks. Prior to BAM Trading I was with a fintech start-up that enabled realtime payments for bill pay. I was with the company for five years. I hold a patent along with my
1
PDF Page 3
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 2 of 8
former co-workers from that company and many of the company’s clients were banks. Prior to my
last role I served as a senior leader for a few start-ups.
3.
As set forth below, cash held on behalf of customers by BAM Trading is safe,
secure, and available to immediate withdrawal by customers, subject to limitations imposed by
BAM Trading’s banking partners. BAM Trading holds customer cash in segregated accounts with
its payment processing partner banks that are entirely separate from BAM Trading’s own cash.
4.
Neither Changpeng Zhao (“Zhao”), BAM Trading’s ultimate beneficial owner, nor
anyone associated with Binance Holdings Limited (“BHL”) has authority to withdraw or transfer
cash held on behalf of BAM Trading’s customers or corporate cash held for BAM Trading’s own
benefit.
5.
However, the pendency of this matter—and specifically the SEC’s motion for a
temporary restraining order—has made it difficult for BAM Trading to maintain its indirect
banking relationships, impacting customers’ ability to withdraw their cash off of the BAM Trading
platform.
6.
The following describes the state of BAM Trading’s banking relationships as of the
date of this declaration. My understanding is that all of this information has already been provided
to the SEC Staff in connection with its investigation of BAM Trading.
I.
BAM TRADING
7.
BAM Trading operates a digital asset exchange in the United States.
8.
From June 2019 through the present, BAM Trading has been registered as a money
services business with the Financial Crimes Enforcement Network (“FinCen”), a bureau of the
United States Department of Treasury.
2
PDF Page 4
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 3 of 8
9.
Since it began operating in 2019, BAM Trading has over time obtained money
services business licenses, or otherwise been permitted to conduct business, in 43 states and the
District of Columbia, and is subject to regular examination by these jurisdictions.
10.
After completing BAM Trading’s onboarding requirements, which include Know
Your Customer processes, BAM Trading customers have historically been allowed to deposit cash
to their BAM Trading accounts using debit cards, Automated Clearinghouse (“ACH”) transfers,
or wire transfers from their bank accounts. These funds could then be used to purchase crypto
assets on the BAM Trading platform.
11.
BAM Trading customers have also historically been able to convert crypto assets
holdings in their BAM Trading accounts to cash.
12.
BAM Trading customers have also historically been able to withdraw cash from
their BAM Trading accounts to their external bank accounts using ACH transfers, or wire transfers.
13.
Since the filing of this action and the SEC’s Motion for a Temporary Restraining
Order, several of BAM Trading’s banking partners have indicated that they are no longer willing
to provide banking services to BAM Trading. It has also been difficult to identify direct or indirect
substitute banking partners. As a result, BAM Trading announced that it would cease processing
deposits or withdrawals of cash as of June 13, 2023.
II.
BAM TRADING’S BANKING RELATIONSHIPS
14.
BAM Trading processes cash for customers through partnerships with banks and
payment processors.
15.
BAM Trading held certain customer cash at Axos Bank, where it maintains separate
accounts for customer assets and corporate assets. On June 9, 2023, BAM Trading initiated the
3
PDF Page 5
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 4 of 8
transfer the customer cash held at Axos Bank to BitGo Trust Company Inc. (“BitGo”). I describe
our accounts at BitGo in more detail below.
a.
BAM Trading’s senior executives are the only authorized signatories on
BAM Trading’s Axos Bank accounts for both corporate and customer cash.
b.
Neither Mr. Zhao nor anyone from BHL have any ability to transfer funds
from BAM Trading’s Axos Bank accounts for both corporate and customer cash.
16.
BAM Trading also holds certain customer cash at BitGo, Nuvei US LLC (“Nuvei”),
Orum Money Movement (“Orum”), Wyre Payments Inc. (“Wyre”), and, until recently, Prime
Trust, LLC (“Prime Trust”).
a.
These entities are third-party payment processors, which are sometimes
referred to as “fintech bank partners.”
These payment processors provide various money
transmissions services and access to banking services.
b.
BAM Trading’s payment processors maintain omnibus accounts on behalf
of BAM Trading’s customers, which in turn have custodial relationships with various bank
partners. Until recently, BAM Trading maintained both customer and corporate cash at Prime
Trust.
i.
Under these arrangements, BAM Trading or a BAM Trading
customer transfers cash to the payment processor, which then transfers the cash into the payment
processor’s bank account held for the benefit of the payment processors customers.
ii.
Customer-initiated withdrawals of cash maintained by these
payment processors are automatically approved, up to specified limits set by BAM Trading or the
relevant payment processor or its banking partners.
4
PDF Page 6
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 5 of 8
iii.
Customer-initiated transfers above these limits, or transfers initiated
by BAM Trading for treasury-management purposes, must be approved by BAM Trading’s
“authorized account owners” or “authorized account managers” at each payment processor.
Authorized account “owners” are senior executives with BAM Trading. Authorized account
“managers” are members of the Treasury or Treasury Operations team who have access to manage
day-to-day operations of the accounts. All transfers must be approved by an authorized account
owner. At some institutions, authorized account managers have authority to initiate transfers;
however, these transactions still require the approval of an authorized account owner before they
can be processed.
iv.
Designated personnel at the respective payment processors serve as
direct signatories on the bank accounts held in the processors’ respective names. BAM Trading
does not have a direct relationship with the payment processors’ banks.
v.
Neither Mr. Zhao nor anyone from BHL have any ability to initiate
transactions by payment processors concerning funds belonging to BAM Trading or BAM Trading
customers.
c.
BitGo: BAM Trading maintains inactive cash at BitGo on behalf of
customers in their BAM Trading accounts.
i.
Members of the Treasury or Treasury Operations team are the only
authorized account owners on BAM Trading’s BitGo cash accounts.
ii.
Neither Mr. Zhao nor anyone from BHL have any ability to transfer
funds from BAM Trading’s BitGo accounts.
iii.
As noted above, BAM Trading initiated the transfer of the customer
cash held at Axos Bank to BitGo on June 9, 2023.
5
PDF Page 7
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 6 of 8
Orum: BAM Trading has an account with Orum that allows customers to
d.
deposit or withdraw cash using ACH transfers or wire transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Orum
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Orum accounts.
Nuvei: BAM Trading has an account with Nuvei that allows customers to
e.
deposit or withdraw cash using debit cards or ACH transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Nuvei
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Nuvei accounts.
Wyre: BAM Trading has an account with Wyre that allows customers to
f.
deposit or withdraw funds using wire transfers.
i.
Senior executives and members of the Treasury or Treasury
Operations team are the only authorized account owners and managers on BAM Trading’s Wyre
accounts.
ii.
Neither Mr. Zhao nor anyone from BHL has ever had any ability to
transfer funds from BAM Trading’s Wyre accounts.
g.
Prime Trust: Until recently, BAM Trading had an account with Prime
Trust that allowed customers to deposit or withdraw cash using various protocols. BAM Trading
6
PDF Page 8
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 7 of 8
also maintained certain corporate cash at Prime Trust. BAM Trading has since transferred all
customer cash out of its Prime Trust account.
i.
Senior executives and members of the Treasury or Treasury
Operations team were the only authorized account owners and managers on BAM Trading’s Prime
Trust accounts.
ii.
Neither Mr. Zhao nor anyone from BHL had any ability to transfer
customer or corporate funds from BAM Trading’s Prime Trust accounts during my tenure at BAM
Trading.
iii.
BAM Trading’s June 1, 2023 letter to the SEC Staff in response to
its May 30, 2023 letter request inadvertently indicated that Mr. Zhao was a signatory on BAM
Trading’s Prime Trust accounts. 1 BAM Trading’s June 2, 2023 letter to the SEC Staff corrected
this issue and noted that Mr. Zhao was listed as an ultimate beneficial owner of BAM Trading’s
Prime Trust account, but was not an authorized signatory, authorized account owner, or authorized
account manager.
iv.
Ultimate beneficial owners are recorded as part of financial
institutions’ Know Your Customer requirements. However, ultimate beneficial owners do not
have the authority or ability to transfer or withdraw assets from an account.
v.
The SEC’s Motion for a Temporary Restraining Order incorrectly
states “documents Prime Trust produced to the SEC” suggest that Mr. Zhao “had signatory
authority over [BAM Trading’s Prime Trust] account” until May 2023. However, the cited Exhibit
A-67 correctly identifies Mr. Zhao as an ultimate beneficial owner of the Prime Trust account, not
an account signatory, account owner, or account manager. As noted above, being identified as an
I understand that this issue was the result of an inadvertent mix-up that arose during BAM Trading’s attempts
to provide a response to the SEC’s requests in the less than 48 hours demanded by the SEC Staff.
1
7
PDF Page 9
Case 1:23-cv-01599-ABJ Document 44 Filed 06/12/23 Page 8 of 8
ultimate beneficial owner did not give Mr. Zhao any ability to withdraw or transfer funds from
BAM Trading’s Prime Trust account.
III.
CONCLUSION
17.
BAM Trading maintains control over the cash deposited by its customers. Subject
to restrictions imposed by BAM Trading’s banks and payment processors, customers have the
ability to immediately withdraw any cash held in their BAM Trading accounts.
18.
No BHL employee or combination of employees has the ability or authority to
transfer or withdraw cash held on behalf of BAM Trading’s customers and I am not aware of any
instances in which BHL employees sought to move cash held on behalf BAM Trading’s customers.
19.
Further, the SEC’s motion for a temporary restraining order contains no evidence
that BHL or Mr. Zhao have exerted any authority of BAM Trading’s bank accounts since I joined
BAM Trading in August 2021.
20.
The only allegation that post-dates August 2021 is the allegation that Mr. Zhao was
listed as a signatory on BAM Trading’s Prime Trust account until at least May 2023. However,
the evidence proffered by the SEC shows that Mr. Zhao was not a signatory on that account and
was, instead, only listed as the account’s ultimate beneficial owner.
I declare under penalty of perjury under the laws of the United States of America that the foregoing
is true and correct.
Executed this 12th day of June, 2023, in Washington, District of Columbia.
/s/ Sara Sisenwein__________
Sara Sisenwein
8
Back to 
