Memorandum in Opposition re [102] to Motion to Compel and Reply in Further Support of BAM Defendants' Motion for a Protective Order (Redacted) filed by BAM MANAGEMENT US HOLDINGS INC., BAM TRADING SERVICES INC.. (Attachments: # (1) Declaration of Matthew Beville, # (2) Exhibit 1 (Redacted), # (3) Exhibit 2 (Redacted), # (4) Exhibit 3 (Redacted), # (5) Exhibit 4 (Redacted), # (6) Exhibit 5 (Redacted), # (7) Exhibit 6 (Redacted), # (8) Exhibit 7 (Redacted), # (9) Exhibit 8 (Redacted))(McLucas, William) Modified event title on 9/12/2023 (znmw).
Page 1 UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Civil Action No. 1:23-cv-01599-ABJ
v.
BINANCE HOLDINGS LIMITED, et al.,
Defendants.
DECLARATION OF MATTHEW BEVILLE
I, MATTHEW BEVILLE, declare pursuant to 28 U.S.C. § 1746 as follows:
1.
I am an attorney of the law firm Wilmer Cutler Pickering Hale & Dorr LLP,
Pennsylvania Ave., NW, Washington, DC 20037. I am counsel to Defendants BAM Trading
Service, Inc. (“BAM Trading”) and BAM Management US Holdings Inc. (“BAM Management,”
collectively with BAM Trading, “BAM”).
I submit this declaration in support of BAM
Defendants’ Opposition To Plaintiff Securities And Exchange Commission’s Motion To Compel
And Reply In Further Support Of Bam Defendants’ Motion For A Protective Order.
2.
I have personal knowledge of the matters set forth in this declaration, and if called
as a witness, I could and would competently testify under oath to the facts stated herein.
3.
BAM has explained, including in a presentation to the SEC in March 2023 as well
as in filings with this Court, that it relies on wallet custody software developed by BHL to maintain
the digital asset wallets that hold much of its customers’ assets.
4.
On June 17, 2023, the Court entered the Consent Order (Dkt. 71) in this matter.
Since that time, BAM has conferred with the SEC on a number of occasions about expedited
discovery issues, including on June 12, June 21, June 30, July 7, July 24, July 31, August 3, and
-1-Page 2 August 4, 2023. BAM has also made several productions pursuant to the Consent Order, discovery
requests, and interrogatories, and provided additional information through letters and email
correspondence, including on July 7, July 10, July 13, July 24, July 19, July 26, July 31, August
3, and August 7, and August 14, 2023.
5.
During its negotiations over the Consent Order, including in a call on June 12, 2023,
and August 3, 2023, BAM was explicit that it would continue using the Binance Holdings Limited
(“BHL”) wallet custody software and that there was no way to transition its wallets to another
provider in a timely or cost-effective manner.
6.
In connection with the SEC’s investigation, BAM provided several detailed
overviews of its custody practices and responded to a number of specific questions posed by the
SEC Staff. A true and correct copy of BAM’s May 25, 2023 letter is attached as Exhibit 1. A
true and correct copy of BAM’s May 26, 2023 letter is attached as Exhibit 2. A true and correct
copy of BAM’s June 1, 2023 letter is attached as Exhibit 3. A true and correct copy of BAM’s
June 2, 2023 letter is attached as Exhibit 4.
7.
On June 21, 2023, counsel for BAM met and conferred with the SEC. During this
meeting, counsel for BAM asked that the SEC staff prioritize its deposition or interview of BAM
employees Erik Kellogg, BAM’s Chief Information Security Officer, and Sara Sisenwein, BAM’s
Senior Director of Treasury Operations, as they were most knowledgeable about the custody,
transfer, and security of BAM customer assets. BAM stated, in substance, that meeting with Mr.
Kellogg and Ms. Sisenwein might assuage the SEC’s concerns or otherwise help to narrow the
SEC’s discovery requests. BAM remains willing to provide the SEC the information that it
reasonably needs to confirm that BAM’s customer assets are safe and secure.
-2-Page 3 8.
On June 30, 2023, pursuant to the Consent Order, BHL and Changpeng Zhao
(BAM’s CEO) have confirmed in writing that they do not have custody or control over the private
keys for BAM’s customer assets.
A true and correct copy of Rohit V. Wad’s (BHL’s Chief
Technology Officer) confirmation is attached as Exhibit 5. A true and correct copy of Mr. Zhao’s
confirmation is attached as Exhibit 6.
9.
On July 5, 2023, BAM served the SEC with its Responses and Objections to
Plaintiffs First Set of Requests for Production. Dkt. 102-9. On July 13, 2023, BAM served the
SEC with its Responses and Objections to Plaintiff’s First Set of Interrogatories. Dkt. 102-11.
10.
On August 18, 2023, BAM produced additional responsive documents regarding
bank opening and authorization, which identified current and former BAM personnel who have
(or had during the relevant period) authorization to initiate and/or approve transactions or are
signatories for BAM’s bank accounts and payment processors.
11.
On August 24, 2023, the SEC deposed Erik Kellogg. A true and correct copy of
excerpted portions of Mr. Kellogg’s deposition transcript is attached as Exhibit 7.
12.
On August 24, 2023, the SEC requested “the letter that Mr. Fernandez testified
FGMK received from BAM on August 18, 2023.” BAM produced that document four days later.
A true and correct copy of BAM’s August 28, 2023 production cover letter is attached as Exhibit
8.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on this 11th day of September, 2023.
/s/ Matthew Beville
Matthew Beville
-3-
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Case 1:23-cv-01599-ABJ-ZMF Document 108-1 Filed 09/12/23 Page 1 of 3
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Civil Action No. 1:23-cv-01599-ABJ
v.
BINANCE HOLDINGS LIMITED, et al.,
Defendants.
DECLARATION OF MATTHEW BEVILLE
I, MATTHEW BEVILLE, declare pursuant to 28 U.S.C. § 1746 as follows:
1.
I am an attorney of the law firm Wilmer Cutler Pickering Hale & Dorr LLP, 2100
Pennsylvania Ave., NW, Washington, DC 20037. I am counsel to Defendants BAM Trading
Service, Inc. (“BAM Trading”) and BAM Management US Holdings Inc. (“BAM Management,”
collectively with BAM Trading, “BAM”).
I submit this declaration in support of BAM
Defendants’ Opposition To Plaintiff Securities And Exchange Commission’s Motion To Compel
And Reply In Further Support Of Bam Defendants’ Motion For A Protective Order.
2.
I have personal knowledge of the matters set forth in this declaration, and if called
as a witness, I could and would competently testify under oath to the facts stated herein.
3.
BAM has explained, including in a presentation to the SEC in March 2023 as well
as in filings with this Court, that it relies on wallet custody software developed by BHL to maintain
the digital asset wallets that hold much of its customers’ assets.
4.
On June 17, 2023, the Court entered the Consent Order (Dkt. 71) in this matter.
Since that time, BAM has conferred with the SEC on a number of occasions about expedited
discovery issues, including on June 12, June 21, June 30, July 7, July 24, July 31, August 3, and
-1-
PDF Page 3
Case 1:23-cv-01599-ABJ-ZMF Document 108-1 Filed 09/12/23 Page 2 of 3
August 4, 2023. BAM has also made several productions pursuant to the Consent Order, discovery
requests, and interrogatories, and provided additional information through letters and email
correspondence, including on July 7, July 10, July 13, July 24, July 19, July 26, July 31, August
3, and August 7, and August 14, 2023.
5.
During its negotiations over the Consent Order, including in a call on June 12, 2023,
and August 3, 2023, BAM was explicit that it would continue using the Binance Holdings Limited
(“BHL”) wallet custody software and that there was no way to transition its wallets to another
provider in a timely or cost-effective manner.
6.
In connection with the SEC’s investigation, BAM provided several detailed
overviews of its custody practices and responded to a number of specific questions posed by the
SEC Staff. A true and correct copy of BAM’s May 25, 2023 letter is attached as Exhibit 1. A
true and correct copy of BAM’s May 26, 2023 letter is attached as Exhibit 2. A true and correct
copy of BAM’s June 1, 2023 letter is attached as Exhibit 3. A true and correct copy of BAM’s
June 2, 2023 letter is attached as Exhibit 4.
7.
On June 21, 2023, counsel for BAM met and conferred with the SEC. During this
meeting, counsel for BAM asked that the SEC staff prioritize its deposition or interview of BAM
employees Erik Kellogg, BAM’s Chief Information Security Officer, and Sara Sisenwein, BAM’s
Senior Director of Treasury Operations, as they were most knowledgeable about the custody,
transfer, and security of BAM customer assets. BAM stated, in substance, that meeting with Mr.
Kellogg and Ms. Sisenwein might assuage the SEC’s concerns or otherwise help to narrow the
SEC’s discovery requests. BAM remains willing to provide the SEC the information that it
reasonably needs to confirm that BAM’s customer assets are safe and secure.
-2-
PDF Page 4
Case 1:23-cv-01599-ABJ-ZMF Document 108-1 Filed 09/12/23 Page 3 of 3
8.
On June 30, 2023, pursuant to the Consent Order, BHL and Changpeng Zhao
(BAM’s CEO) have confirmed in writing that they do not have custody or control over the private
keys for BAM’s customer assets.
A true and correct copy of Rohit V. Wad’s (BHL’s Chief
Technology Officer) confirmation is attached as Exhibit 5. A true and correct copy of Mr. Zhao’s
confirmation is attached as Exhibit 6.
9.
On July 5, 2023, BAM served the SEC with its Responses and Objections to
Plaintiffs First Set of Requests for Production. Dkt. 102-9. On July 13, 2023, BAM served the
SEC with its Responses and Objections to Plaintiff’s First Set of Interrogatories. Dkt. 102-11.
10.
On August 18, 2023, BAM produced additional responsive documents regarding
bank opening and authorization, which identified current and former BAM personnel who have
(or had during the relevant period) authorization to initiate and/or approve transactions or are
signatories for BAM’s bank accounts and payment processors.
11.
On August 24, 2023, the SEC deposed Erik Kellogg. A true and correct copy of
excerpted portions of Mr. Kellogg’s deposition transcript is attached as Exhibit 7.
12.
On August 24, 2023, the SEC requested “the letter that Mr. Fernandez testified
FGMK received from BAM on August 18, 2023.” BAM produced that document four days later.
A true and correct copy of BAM’s August 28, 2023 production cover letter is attached as Exhibit
8.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on this 11th day of September, 2023.
/s/ Matthew Beville
Matthew Beville
-3-
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