Page 1 EXHIBIT 6Page 2 UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
No. 1:23-cv-01599 (ABJ)
BINANCE HOLDINGS LIMITED,
BAM TRADING SERVICES INC.,
BAM MANAGEMENT US HOLDINGS INC.,
AND CHANGPENG ZHAO,
Defendants.
DEFENDANTS BAM TRADING SERVICES INC. AND BAM MANAGEMENT
US HOLDINGS INC.’S RESPONSES AND OBJECTIONS
TO PLAINTIFF’S FIRST SET OF INTERROGATORIES
Pursuant to Rules 26 and 33 of the Federal Rules of Civil Procedure and the Local Rules
of the United States District Court for the District of Columbia (the “Local Rules”), any order
entered in or applicable to the above-referenced litigation (the “Action”), or any other applicable
law or rule, Defendants BAM Trading Services Inc. and BAM Management US Holdings Inc.
(collectively, “BAM”) submit these responses and objections (the “Responses”) to Plaintiff’s First
Set of Interrogatories (collectively, the “Interrogatories” and each an “Interrogatory”), without
waiver of any objections or defenses that BAM asserts in these Responses, previously has asserted,
or hereafter may assert in this Action. Until a Protective Order is entered in this matter, these
Responses and the accompanying production are designated pursuant to the agreement
memorialized in email correspondence dated July 7, 2023.
GENERAL OBJECTIONS
These General Objections apply to the Interrogatories generally and to each Definition,
Instruction, and Interrogatory included in the Interrogatories. These General Objections are
CONFIDENTIALPage 3 incorporated by reference as though set forth in full in the Responses and Objections to Specific
Interrogatories (the “Specific Responses”). Any objection to a Definition or Instruction shall also
apply equally to any other Definition, Instruction, or Interrogatory that incorporates that Definition
or Instruction. These General Objections are neither waived nor limited by the Specific Responses.
The fact that a General Objection is not specified in the Responses does not constitute a waiver of
that objection or otherwise preclude BAM from raising that objection at a later time.
1.
BAM objects to the Interrogatories and the Definitions and Instructions therein to
the extent that they seek or may be construed to impose burdens or obligations that are broader
than, inconsistent with, not authorized by, or otherwise impermissible under the Federal Rules of
Civil Procedure (“Federal Rules”), the Local Rules (including Local Civil Rule 26.2), the case law
interpreting them, the Consent Order entered in this matter of June 17, 2023 (Dkt. 71, hereinafter
“Consent Order”), any orders entered (or that may be entered) in this Action, or any other
potentially applicable rules or laws (collectively, the “Applicable Orders and Rules”).
2.
BAM objects to the Interrogatories to the extent that they are vague, ambiguous,
overbroad, lacking in particularity, and/or call for information beyond the relevant scope of or
disproportionate to the needs of the Consent Order, as well as to the extent that they are unduly
burdensome because they would impose a significant expense and inconvenience on BAM. By
agreeing to provide certain information, BAM does not concede that any of the Interrogatories
seeks information that is within the relevant scope of the Consent Order or otherwise is appropriate
for discovery in this Action.
3.
BAM objects to the Interrogatories, together with their accompanying Definitions
and Instructions, to the extent they purport to seek information that is unreasonably cumulative or
duplicative of one another or of other discovery requests or subpoenas that have been or may be
CONFIDENTIALPage 4 served in this Action, including but not limited to the SEC’s First Set of Requests for Production
of Documents and Inspection to BAM, dated June 23, 2023 (the “RFPs”), and the Consent Order.
4.
BAM objects to the Interrogatories, together with their accompanying Definitions
and Instructions, to the extent they seek information that is obtainable from some other source that
is more convenient, less burdensome, or less expensive, or is publicly available, including but not
limited to (a) documents that have or will be produced to Plaintiff in this Action, (b) deposition
testimony in this Action, and (c) documents filed in this case.
5.
BAM objects to the Interrogatories to the extent that they seek information or legal
theories that are protected by the attorney-client privilege, the work-product doctrine, the jointdefense or common-interest privilege, domestic or foreign criminal or civil laws (including privacy
laws), or any other applicable privilege, immunity, or protection from discovery or disclosure
(“Protected Information”). Nothing contained in this Response is intended to be, nor shall in any
way be construed as, a waiver of any such privilege, immunity, or protection of any other grounds
for objecting to discovery or admissibility of such material, its subject matter, or the information
contained therein. The absence of an Objection to a specific Interrogatory on this ground is neither
intended, nor should be interpreted, as evidence that BAM does not object to an Interrogatory on
the basis of an applicable privilege, immunity, or protection. Inadvertent production of Protected
Information shall not constitute a waiver of any privilege, immunity, or protection or of any other
grounds for objecting to discovery or admissibility of such material, its subject matter, or the
information contained therein, nor shall such production constitute a waiver of BAM’s rights,
under any applicable protective order and the Applicable Orders and Rules, to (i) claw back and
seek the return of such materials, or (ii) object to its use at any stage of this Action or in any other
action or proceeding.
Further, if BAM at any time discovers that it disclosed Protected
CONFIDENTIALPage 5 Information, the receiving party shall promptly undertake commercially reasonable efforts to
return to BAM, sequester, or destroy all copies of such information and documents, as set forth in
the Protective Order. In all events, such return, sequestration, destruction, and/or certification must
occur within ten (10) business days of receipt of the request, unless the parties agree otherwise.
6.
BAM objects to the Interrogatories to the extent that they purport to seek the
production of information that reflects (i) trade secrets; (ii) information that is otherwise
confidential, proprietary, commercially sensitive, or competitively significant to BAM or any
affiliate thereof, current and former directors, employees, consultants, clients, and/or customers of
BAM or any affiliate thereof; (iii) personal information of any present and/or former employee,
consultant, client, and/or customer of BAM or any affiliate thereof; and/or (iv) information that is
subject to other protective orders, non-disclosure agreements, or other confidentiality
undertakings.
7.
BAM objects to the Interrogatories to the extent that they assume the existence of
facts that do not exist or the occurrence of events that did not take place. By responding to an
Interrogatory, BAM does not accept or concede any assertions, definitions, technical descriptions,
express or implied characterizations, or assumptions contained therein, does not admit that any
factual predicate stated in the Interrogatories is accurate, and such response shall not constitute or
be construed as providing an admission concerning any of the Interrogatories.
8.
BAM objects to the Interrogatories to the extent that they are argumentative, lack
foundation, or incorporate allegations and assertions that are disputed, erroneous or irrelevant to
this Action. In responding and objecting to the Interrogatories, BAM does not admit or concede
the correctness of any such allegations or assertions.
CONFIDENTIALPage 6 9.
BAM objects to the Interrogatories to the extent that they purport to require BAM
to draw legal conclusions or are predicated on legal conclusions or arguments. Subject to and
without waiver of its objections in this Response, BAM states that any written response or
provision of information in response to the Interrogatories is not intended to provide, and shall not
constitute or be construed as providing, a legal conclusion or admission.
10.
None of BAM’s Responses should be construed to prevent it from presenting
additional facts and evidence in support of its arguments or defenses at the appropriate stage of
this case.
11.
These Responses are being made after reasonable inquiry into the relevant facts,
and are based only upon the information and documents presently known to BAM. Further
investigation may reveal additional facts or information that could lead to additions to, changes in,
and/or variations from the Responses. Irrespective of whether BAM provides information in
response to the Interrogatories, BAM reserves the right (but does not assume the obligation) to (i)
revise, correct, supplement, amend, modify, or clarify the content of these Responses; (ii) provide
additional responsive information in the future; (iii) object to further discovery in this Action; (iv)
use or rely upon any information produced in this Action in any hearing, proceeding, or trial; (v)
use or rely upon subsequently discovered information or information omitted from this Response
as a result of mistake, error, oversight, or inadvertence in any hearing, proceeding, or trial; and (vi)
challenge the authenticity or admissibility of any information in any hearing, proceeding, or trial.
12.
Any undertaking to meet and confer regarding, search for, or provide information
in response to, any Interrogatory remains subject to the objections in this Response. If and to the
extent BAM were to undertake a search for information, such an undertaking is not intended to be,
and shall not be construed as, an admission that such information exists.
CONFIDENTIALPage 7 OBJECTIONS TO DEFINITIONS AND INSTRUCTIONS
1.
BAM’s Responses and Objections to the Definitions and Instructions are
incorporated by reference in each and every Specific Response and Objection below and have the
same force and effect as if fully set forth therein. By responding to the Interrogatories with a
defined term, BAM is not by implication agreeing with any such definition.
2.
BAM objects to the Definitions, individually and collectively, and to any
Definition, Instruction, or Interrogatory that incorporates the Definitions, to the extent that they
are overbroad, unduly burdensome, vague, and ambiguous.
3.
BAM objects to the Definitions, individually and collectively, and to any
Definition, Instruction, or Interrogatory that incorporates the Definitions, to the extent that they
purport to impose obligations on BAM greater than, or different from, the obligations contained
in the Applicable Orders and Rules.
4.
BAM objects to the Instructions to the extent that they are vague and unduly
burdensome and purport to impose obligations on BAM that go beyond, or that are otherwise
inconsistent with, the Applicable Orders and Rules.
5.
BAM objects to Instruction No. 4 to the extent it requires BAM, for any entity
referenced in the Interrogatories, to be aware of that “entity’s parents, subsidiaries, affiliates,
predecessors, successors, officers, directors, employees, agents, partners, and independent
contractors, as well as aliases, code names, trade names, or business names used by, or formerly
used by, any of the foregoing.” BAM further objects to Instruction No. 4 as vague, ambiguous,
overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of
information within the relevant scope of the Consent Order.
6.
BAM objects to Instruction No. 5 to the extent it requires BAM, for any individual
referenced in the Interrogatories, to be aware of that “individual’s counsel, agents, representatives,
CONFIDENTIALPage 8 or any other person or entity acting or purporting to act on his or her behalf.” BAM further objects
to Instruction No. 5 as vague, ambiguous, overly broad, unduly burdensome, and not reasonably
calculated to lead to the discovery of information within the relevant scope of the Consent Order.
7.
BAM objects to Definition No. 11 to the extent it refers to a “subpoena.” BAM
will interpret Definition No. 11 by replacing “subpoena was” with “Interrogatories were.”
8.
BAM objects to Definitions No. 13 and 14 as overly broad, unduly burdensome,
and inconsistent with the Applicable Orders and Rules. To the extent an Interrogatory uses the
terms “identify” or “identify and describe in detail,” BAM will respond completely and accurately
to the greatest extent possible, in accordance with its obligations under the Applicable Orders and
Rules. BAM will not otherwise apply the definitions of “identify” and “identify and describe in
detail.”
9.
BAM objects to the relevant time period set forth in Instruction No. 16 on the
grounds that the time period of November 1. 2022 to the present is overbroad, unduly burdensome,
and seeks information or documents beyond the relevant scope of and/or disproportionate to the
needs of the Consent Order.
10.
BAM objects to Instruction No. 17 to the extent it requires BAM, for any
knowledge, information, documents, or communications requested by the Interrogatories, to be
aware of knowledge, information, documents, or communications within the possession, care,
custody, or control of “Persons with whom you associate, including family members, friends,
business associates, attorneys, representatives, and agents.” BAM further objects to Instruction
No. 17 as vague, ambiguous, overly broad, unduly burdensome, and not reasonably calculated to
lead to the discovery of information within the relevant scope of the Consent Order.
CONFIDENTIALPage 9 11.
BAM objects to Instruction No. 18 as overly broad, unduly burdensome, and
inconsistent with the Applicable Orders and Rules. Where BAM is unable to respond fully to any
Interrogatory, it will identify the information that it is able to provide and proposes meeting and
conferring with Plaintiff.
SPECIFIC RESPONSES AND OBJECTIONS
INTERROGATORY NO. 1:
Identify all Persons who have access to, possession, custody, or control of any Customer
Assets, the fiat or crypto assets of any of the BAM Entities, or any accounts or crypto asset wallets
holding Customer Assets or the fiat or crypto assets of the BAM Entities, including, but not limited
to, (i) their employment history, including job titles, during the last seven years, including whether
they have been employed, affiliated with, or otherwise received compensation from, any of the
BAM Entities, Binance Entities, or Zhao; (ii) their residence during the past three years and
physical location while working for any of the BAM Entities, Binance Entities, or Zhao; and (iii)
the time period and nature of their access, possession, custody, or control of Customer Assets, the
fiat or crypto assets of any of the BAM Entities, or any accounts or crypto asset wallets holding
Customer Assets or the fiat or crypto assets of the BAM Entities.
RESPONSE TO INTERROGATORY NO. 1:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; (ii) residences and physical
locations during the last three years; (iii) historical access, possession, custody, or control of
Customer Assets; and/or (iv) assets other than Customer Assets. BAM further objects to this
Interrogatory as vague and ambiguous on the ground that it seeks information on persons
“affiliated with” any of the BAM Entities, Binance Entities, or Zhao, and will interpret this
Interrogatory as if that phrase is not included.
Notwithstanding the foregoing objections, BAM refers Plaintiff to its Response to
Interrogatory No. 3.
CONFIDENTIALPage 10 INTERROGATORY NO. 2:
Identify all Persons who have access to, possession, custody, or control of Private and
Administrative Keys or New Private and Administrative Keys or other software or protocols
Concerning the deposit, custody, control, security, transfer, segregation, or withdrawal of
Customer Crypto Assets, including, but not limited to, (i) their employment history, including job
titles, during the last seven years, including whether they have been employed, affiliated with, or
otherwise received compensation from any of the BAM Entities, Binance Entities, or Zhao; (ii)
their residence during the past three years and physical location while working for any of the BAM
Entities, Binance Entities, or Zhao; and (iii) the time period in which they held such Private and
administrative Private and Administrative Keys or New Private and Administrative Keys or other
software or protocols responsive to this Interrogatory. This response should include the date when
any Private and Administrative Key or New Private and Administrative Key holder who was a
former employee or in any way affiliated with any of the Binance Entities ended such employment
or affiliation and started employment with BAM Trading or BAM Management.
RESPONSE TO INTERROGATORY NO. 2:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; (ii) residences and physical
locations during the last three years; (iii) historical possession of the Private and Administrative
Keys; and (iv) the date on which employment or affiliation the Binance Entities was terminated.
BAM further objects to this Interrogatory as vague and ambiguous on the ground that it seeks
information on whether relevant persons “affiliated with” any of the BAM Entities, Binance
Entities, or Zhao, and will interpret this Interrogatory as if that phrase is not included. BAM further
objects to this Interrogatory on the ground that “other software or protocols” is vague and
ambiguous and will interpret this Interrogatory as though that phrase is not included.
Notwithstanding the foregoing objections, on the document bearing Bates No.
BAM_SEC_LIT_00000132, BAM identifies the BAM employees who previously had custody of
the Private and Administrative Keys, as well as the individuals who have custody of the New
CONFIDENTIALPage 11 Private and Administrative Keys, their current BAM job title, whether they have been employed
by the Binance Entities or Zhao, and their current country of residence.
INTERROGATORY NO. 3:
Identify all Persons involved in, designated to, and/or having authority over the Treasury,
Clearing, Security, SecOps, Fraud & Risk, Legal, Compliance, CX, and Custody Partners Teams,
including the Persons associated with the following roles: Clearing Member, Clearing Lead,
Treasury Member, Treasury Lead, CISO/Security, CFO, VP/Treasury, CX Agent, Fraud/Risk
Member (see Binance.US Digital Asset & Custody Operations Policy at 4/18, 6/18 BTS00833839, at BTS00833841), or any other individual or entity that are otherwise involved in
the custody, control, security, clearing, settlement, deposits, transfer, withdrawals, movement,
segregation, restrictions, or other management of Customer Assets. The response should include,
but is not limited to, (i) their employment history, including job titles, over the last seven years,
including whether they have been employed by, affiliated with, or otherwise received
compensation from any of the BAM Entities, Binance Entities, or Zhao; and (ii) their residence
during the past three years and physical location while working for any of the BAM Entities,
Binance Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 3:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; and (ii) residences and physical
locations during the last three years. BAM further objects to this Interrogatory as vague and
ambiguous to the extent that its seeks information on “any other individual or entity that are
otherwise involved in the custody, control, security, clearing, settlement, deposits, transfer,
withdrawals, movement, segregation, restrictions or other management of Customer Assets,” and
will interpret this Interrogatory as if that phrase is not included. BAM further objects to this
Interrogatory as vague and ambiguous on the ground that it seeks information on whether relevant
persons “affiliated with” any of the BAM Entities, Binance Entities, or Zhao, and will interpret
this Interrogatory as if that phrase is not included.
CONFIDENTIALPage 12 Notwithstanding the foregoing objections, BAM is producing a spreadsheet bearing Bates
No. BAM_SEC_LIT_00000091 that identifies the individuals who presently have a role or
responsibility concerning the possession, custody, or control of Customer Assets, as well as their
current job title, whether they have been employed by the Binance Entities or Zhao, their current
country of residence, and whether they have a role under the Binance.US Digital Asset & Custody
Operations Policy. This list includes individuals who have roles related to the possession, custody,
or control of Customer Assets, even if they do not personally have the ability to approve any
transfers or movements of Customer Assets, either individually or as part of a quorum of other
BAM personnel. BAM also has a legal department that, as necessary, advises the personnel
identified on the foregoing spreadsheet concerning custody and control of Customer Assets, and
accounting and internal audit personnel who provide services related to Customer Assets.
Defendants BHL and Zhao do not have possession, custody, or control of any Customer Assets.
INTERROGATORY NO. 4:
Identify all BAM Trading and BAM Management officers, employees, and contractors, as
of the date of the filing of the SEC’s Complaint, ECF No. 1, including, but not limited to, (i) their
employment history, including job titles, during the last five years; (ii) any current or past
relationship or affiliation with any of the Binance Entities or Zhao; and (iii) their residence during
the past three years and physical location while working for any of the BAM Entities, Binance
Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 4:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order, including to the extent it seeks: (i)
information on BAM employees who do not have the ability to control Customer Assets; (ii)
employment histories over the last seven years; and (iii) residences and physical locations during
the last three years. BAM further objects to this Interrogatory as vague and ambiguous on the
CONFIDENTIALPage 13 ground that it seeks information on “any current or past relationship or affiliation with any of the
Binance Entities or Zhao,” and will interpret this Interrogatory as if that phrase is not used. BAM
further objects to this Interrogatory to the extent that it seeks duplicative information, including
information contained in documents sought by other Interrogatories and the RFPs.
Notwithstanding the foregoing objections, BAM is producing a spreadsheet bearing Bates
No. BAM_SEC_LIT_00000092 that identifies BAM’s officers, employees, and contractors as of
the date of Plaintiff’s complaint, their job title, whether they have been employed by the Binance
Entities or Zhao, and the BAM Division within which they work.
INTERROGATORY NO. 5:
Identify any Persons with any equity or other ownership interest in BAM Trading and
BAM Management, and any changes to the ownership interests of the BAM Entities during the
relevant time period.
RESPONSE TO INTERROGATORY NO. 5:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order, including to the extent it seeks historical
information concerning BAM’s ownership interests. Notwithstanding the foregoing objections,
BAM refers Plaintiff to the documents reflecting BAM’s ownership interests at various points in
time, which was previously produced at BAM_SEC_LIT_00000067 through 00000071.
INTERROGATORY NO. 6:
Identify and describe in detail BAM Trading’s policies, procedures, protocols, and controls
for the possession, custody, control, transfer, movement, security, segregation, availability, and
any encumbrances or limitations of Customer Assets, including (i) the Person(s) involved in their
development, maintenance, performance, operation, and enforcement; and (ii) any changes in
those policies, procedures, protocols, and controls during the relevant time period.
CONFIDENTIALPage 14 RESPONSE TO INTERROGATORY NO. 6:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning BAM’s policies, procedures, protocols, and controls concerning Customer
Assets. Notwithstanding the foregoing objections, BAM refers Plaintiff to its policies and
procedures produced in discovery and the Declaration of Erik Kellogg, dated June 12, 2023 (Dkt.
42; the “Kellogg Declaration”) and the Declaration Sara Sisenwein, dated June 12, 2023 (Dkt. 44;
the “Sisenwein Declaration”) concerning the possession, custody, and control of digital and fiat
assets, respectively.
With respect to Sisenwein Declaration, BAM provides the following updates: (i) since at
least the entry of the Consent Order, BAM’s banking partners are allowing users to withdraw funds
(Sisenwein Decl. ¶ 5); (ii) BAM ceased processing deposits of cash on or about June 13, 2023 and
will cease processing withdrawals of cash on or about July 20, 2023. The deadline for processing
withdrawals was extended because BAM’s banking partners were not permitting withdrawals for
a period of time, but have since reenabled withdrawals (id. ¶ 13); (iii) BAM no longer maintains
customer cash at Axos, Nuvei, Wyre, or Prime Trust (id. ¶¶ 15, 16); (iv) BAM customer fiat assets
are currently held at BitGo Trust Company Inc. (“BitGo”) and Orum Money Movement (“Orum”);
(v) BAM customers can no longer deposit cash with Orum but can withdraw cash via ACH until
on or about July 20, 2023 (id. ¶ 16(d); and (vi) BAM no longer has a banking relationship with
Wyre (id. ¶ 16(f)).
With respect to the Kellogg Declaration, BAM (i) refers the SEC to Mr. Kellogg’s
certifications dated June 29, 2023 and July 7, 2023 and to BAM’s Response to Interrogatory No.
2 (Kellogg Declaration ¶ 33(a)(i)); and notes that transfer requests are now sent to BAM personnel
CONFIDENTIALPage 15 (not BHL personnel) who then issues the TSS-approval request (id. ¶ 33(c)(i)). BHL personnel no
longer have any role with respect to TSS-approval for BAM Customer Assets.
INTERROGATORY NO. 7:
Identify all crypto asset wallet addresses that are “white listed” for transfers to or from
crypto asset wallets holding Customer Assets, and describe in detail the process by which new
crypto asset wallets could be whitelisted, including, but not limited to, the identification of all
Persons involved in the whitelisting process, and their employment history over the last seven
years, including whether they have been employed by, affiliated with, or otherwise received
compensation from any of the BAM Entities, Binance Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 7:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks employment
histories over the last seven years and information concerning any compensation from any of the
BAM Entities, Binance Entities, or Zhao. BAM further objects to this Interrogatory as vague and
ambiguous on the ground that it seeks information on whether relevant persons “affiliated with”
any of the BAM Entities, Binance Entities, or Zhao, and will interpret this Interrogatory as if that
phrase is not included.
Notwithstanding the foregoing objections, a list of whitelisted wallet addresses is being
produced as BAM_SEC_LIT_0000093. The whitelisting process is described in the Kellogg
Declaration at paragraphs 3.b. and 36.b., except that the individuals involved in that process are
those that hold the New Private and Administrative Keys as identified in BAM’s Response to
Interrogatory No. 2.
INTERROGATORY NO. 8:
Identify all Documents, Communications, and other evidence to support your contention
that the Wallet Custody Agreement between Binance and BAM Trading was “never
operationalized” and “was never actually implemented and did not govern BAM’s custody
practices,” see, e.g., BAM Trading Opp. Br., ECF No. 40, at 13, including, but not limited to, all
CONFIDENTIALPage 16 Documents, Communications, and other evidence you rely upon to rebut (i) BAM Trading’s
current CEO’s affirmation to BAM Trading’s auditors that Binance could “exert[] control over
any digital wallet holding either corporate or custodial digital assets held on [BAM Trading’s]
behalf,” see SEC TRO Mem., ECF No. 28, Ex. A-72, at pg. 4; id. Ex. A-73, at pg. 9; (ii) BAM
Trading’s financial statements stating that, at least until December 1, 2022, Customer Crypto
Assets and company crypto assets “were held in custody accounts through the Wallet Custody
Agreement.” Id. Ex. A-74, at BTS00833810; and (iii) counsel for BAM Trading’s submissions to
SEC staff that identified Binance as its custodian of crypto assets, see, e.g., BTS00042025, at
BTS00058738.
RESPONSE TO INTERROGATORY NO. 8:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
proposes that the parties continue to meet and confer regarding discovery requests related to the
Wallet Custody Agreement.
INTERROGATORY NO. 9:
Identify all Persons that have or had the role and responsibilities or otherwise performed
or continue to perform the services identified in the Wallet Custody Agreement, whether or not
such role, responsibilities, or services were pursuant to any formal agreement, including, but not
limited to, (i) the role, responsibility, and service(s) performed by such Person(s); and (ii) the
corresponding dates such Person(s) had such role or responsibility or performed such service(s).
RESPONSE TO INTERROGATORY NO. 9:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
intends to identify individuals who had roles with respect to wallet custody during the relevant
time period and proposes that the parties confer after BAM does so.
CONFIDENTIALPage 17 INTERROGATORY NO. 10:
Identify all Documents and Communications Concerning internal or external audits of the
BAM Entities’ possession, custody, control, transfer or movement, security, segregation,
availability, and any encumbrances or limitations to its Customer Assets.
RESPONSE TO INTERROGATORY NO. 10:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning the custody and control of Customer Assets.
Notwithstanding the
foregoing objections, BAM proposes that the parties continue to meet and confer regarding
discovery requests concerning internal and external audits.
INTERROGATORY NO. 11:
Identify all Documents, Communications, or other evidence that the BAM Entities may
contend rebuts BAM Trading’s auditor’s finding in May 2022 that BAM Trading “is dependent
on the [Binance].com custodian to tell them the addresses holding the assets,” and that it “makes
it very difficult to ensure the Company is fully collateralized at specific points in time,” SEC TRO
Mem., Ex. A-89, at Armanino-BAM-000134, including whether You contend that the statement
was not true when the finding was made, and/or is not true today.
RESPONSE TO INTERROGATORY NO. 11:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about the custody and control of Customer Assets. Notwithstanding the foregoing
objections, BAM proposes that the parties continue to meet and confer regarding discovery
requests concerning internal and external audits.
INTERROGATORY NO. 12:
Identify and describe in detail the basis for the decision to maintain custody or control of
any Customer Assets, including Staking Assets, and any Private and Administrative Keys outside
CONFIDENTIALPage 18 of the United States, including the Persons involved in such discussions and decisions, and their
employment history or any other relationship or agreement with any of the BAM Entities, Binance
Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 12:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about the custody and control of Customer Assets. Notwithstanding the foregoing
objections, BAM proposes that the parties meet and confer regarding this Interrogatory.
INTERROGATORY NO. 13:
Identify any Customer Assets or fiat or corporate assets of any of the BAM Entities,
including Private and Administrative Keys, that are held outside of the United States or controlled
by Persons outside of the United States, including, but not limited to, (i) the type of asset; (ii)
current value of the asset; (iii) where the asset is located; (iv) how it is held; (v) the name and
contact information of the Persons with custody and control of such assets;(vi) the relationship or
affiliation of such Persons with any of the BAM or Binance Entities; and (vii) the time period the
assets or keys have been outside of the United States.
RESPONSE TO INTERROGATORY NO. 13:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information about
the corporate assets of BAM Entities and historical information about Customer Assets.
Notwithstanding the foregoing objections, BAM responds that no Customer Assets, including
Private and Administrative Keys, are held outside of the United States or controlled by Persons
outside of the United States.
INTERROGATORY NO. 14:
Identify and describe in detail the role of any of the Binance Entities, including Sigma
Chain and Merit Peak, in the possession, custody, or control of Customer Assets.
CONFIDENTIALPage 19 RESPONSE TO INTERROGATORY NO. 14:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets. BAM further objects to this Interrogatory to the extent
that it seeks duplicative information, including information provided by BAM to Plaintiff during
the investigation that preceded this Action. Notwithstanding the foregoing, BAM responds that
Merit Peak no longer operates on BAM’s platform, and Merit Peak and Sigma Chain do not have
a role in the possession, custody, or control of Customer Assets.
INTERROGATORY NO. 15:
Identify and describe in detail any agreement, relationship, affiliation, or association
between any of the Binance Entities and any Person with any access, possession, authority,
custody, or control of any Customer Assets, fiat or crypto assets of any of the BAM Entities, or
any account or wallet holding Customer Assets or the fiat or crypto assets of any of the BAM
Entities, including, but not limited to, the extent to which any of the Binance Entities or Zhao has
the authority over or the ability to direct or instruct such Persons.
RESPONSE TO INTERROGATORY NO. 15:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets or information unrelated to Customer Assets. BAM further
objects to this Interrogatory as vague and ambiguous on the ground that it seeks information on
the “relationships,” “affiliations,” or “associations” between any of the Binance Entities and any
Person with access, possession, authority, custody, or control of any Customer Assets or the fiat
or crypto assets of any of the BAM Entities. BAM further objects to this Interrogatory to the extent
CONFIDENTIALPage 20 that it seeks duplicative information, including information sought by other Interrogatories and
information contained in documents sought by the RFPs.
Notwithstanding the foregoing objections, BAM responds that the Binance Entities and
Zhao do not have authority over or the ability to direct or instruct any Person with respect to the
custody or control of Customer Assets. BAM refers Plaintiff to its responses to Interrogatory Nos.
1 through 3 for more information on the Persons with custody or control of Customer Assets.
INTERROGATORY NO. 16:
For all crypto asset wallets associated with the BAM Entities or Binance.US trading
platform, identify each of the assets held in each wallet and the volume and the current value of
each asset (including the value of each asset in U.S. Dollars) held in each wallet.
RESPONSE TO INTERROGATORY NO. 16:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets. BAM further objects to this Interrogatory to the extent
that it seeks duplicative information, including information contained in documents sought by the
RFPs or required to be produced pursuant to the Consent Order. Notwithstanding the foregoing
objections, BAM refers Plaintiff to the materials produced on July 10, 2023 pursuant to Part IV of
the
Consent
Order
bearing
Bates
numbers
BAM_SEC_LIT_
through
BAM_SEC_LIT_00000075.
INTERROGATORY NO. 17:
Identify and describe in detail all systems and Persons involved in the management of any
accounts, crypto asset wallets, Customer Assets, and fiat or crypto assets of the BAM Entities.
CONFIDENTIALPage 21 RESPONSE TO INTERROGATORY NO. 17:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
unrelated to Customer Assets or historical information about Customer Assets. BAM further
objects to this Interrogatory as vague and ambiguous on the ground that it seeks information on all
systems and Persons “involved in the management” of any accounts, crypto asset wallets,
Customer Assets, and fiat or crypto assets of the BAM Entities. BAM further objects to this
Interrogatory to the extent that it seeks duplicative information, including information contained
in documents sought by the RFPs. Notwithstanding the foregoing objections, BAM refers Plaintiff
to its Responses to Interrogatory Nos. 1 through 3 and the Kellogg and Sisenwein Declarations, as
updated by the Responses to these Interrogatories.
INTERROGATORY NO. 18:
Identify and describe in detail all policies, procedures, protocols, and controls Concerning
or referenced in the Binance.US Digital Asset & Custody Operations Policy, including
identification of the Person(s) involved and their functions or roles.
RESPONSE TO INTERROGATORY NO. 18:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
identifies the Binance.US Cyber Risk Management Policy; Binance.US Digital Asset & Custody
Security Standard (in draft form); and Binance.US Security Vendor Management Policy, which
are
being
produced
pursuant
to
Bates
Nos.
BAM_SEC_LIT_
through
BAM_SEC_LIT_00000130. As noted in prior productions, BAM is in the process of updating its
CONFIDENTIALPage 22 policies in light of changes required by the Consent Order and will provide revised policies once
they are available. BAM refers Plaintiff to its Responses to Interrogatory Nos. 1 through 3 for
information on the Persons involved in the custody and control of Customer Assets.
INTERROGATORY NO. 19:
Identify and describe in detail how each category of Customer Assets – including Customer
Crypto Assets, Staking Assets, and Customer Fiat Assets – are segregated, including from any fiat
or crypto assets of the BAM Entities, Binance Entities, Zhao, or any other entity or individual.
RESPONSE TO INTERROGATORY NO. 19:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets. Notwithstanding the foregoing objections, BAM refers
Plaintiff to paragraphs 28 through 44 of the Kellogg Declaration for a discussion of Customer
Crypto Assets and Staking Assets, and paragraphs 3, 4, and 14 through 20 of the Sisenwein
Declaration for a discussion of Customer Fiat Assets, as updated by the Responses to these
Interrogatories.
INTERROGATORY NO. 20:
Identify and describe in detail the validators of the company’s staking program and BNB
blockchain, including any affiliation or other relationship they have with the Binance Entities, the
BAM Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 20:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets. BAM further objects to this Interrogatory as vague and
ambiguous because the scope of the request is unclear to the extent it refers to the “BNB
CONFIDENTIALPage 23 blockchain.” BAM further objects to this Interrogatory as vague and ambiguous on the ground
that it seeks information on the validators of the company’s staking program, including “any
affiliation” they have with the Binance Entities, the BAM Entities, or Zhao, and will interpret this
Interrogatory as if that phrase is not used.
Notwithstanding the foregoing objections, BAM is producing a spreadsheet herewith
bearing Bates No. BAM_SEC_LIT_00000131 that identifies validators of BAM’s staking
program. Synclub is the only validator affiliated with the Binance Entities.
INTERROGATORY NO. 21:
Identify whether any BNB wallet, including the omnibus deposit wallet, is a smart contract.
RESPONSE TO INTERROGATORY NO. 21:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent that it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
responds that the BAM BNB hot, cold, and deposit wallets are not smart contracts.
INTERROGATORY NO. 22:
For each blockchain for which the BAM Entities have any crypto asset wallets for company
crypto assets or Customer Assets, identify and describe in detail the following:
a. how the wallets were established;
b. the Person(s) who set up, maintain, have any access to, custody, or control over the
wallets;
c. how they are administrated and operated and by whom;
d. information about the coding and software that governs the wallets;
e. the Persons who hold the Private and Administrative Keys or New Private and
Administrative Keys;
f. how the keys are issued and held;
CONFIDENTIALPage 24 g. the security or consensus protocol terms and other governing policies, procedures,
protocols, or controls;
h. the Persons with any authority or control to change the keys, any protocol that governs
any wallet, or any other authority, control, or access with respect to administration or
operation of the wallet;
i. the authority and role of any of the Binance Entities or Zhao with respect to access,
custody, control, administration, and operation of the wallets and Customer Assets,
including Concerning the deposit, transfer, custody, control, and withdrawal of
Customer Assets
RESPONSE TO INTERROGATORY NO. 22:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets or information unrelated to Customer Assets. BAM further
objects to this Interrogatory to the extent that it seeks duplicative information, including
information sought by other Interrogatories and information contained in documents sought by the
RFPs.
Notwithstanding the foregoing objections, BAM refers Plaintiff to its Responses to
Interrogatory Nos. 1 through 3 and to the Kellogg Declaration. BAM also notes that it is required
to begin establishing new wallets pursuant to Part II, Paragraph 2 of the Consent Order. BAM also
states that BAM employees who possess the New Private and Administrative Keys have the
authority to establish or change the New Private and Administrative Keys. The Binance Entities
and Zhao do not have any authority or role with respect to the custody and control of Customer
Assets.
INTERROGATORY NO. 23:
Identify all Documents and Communications reviewed or relied upon in preparing the
response to these Interrogatories or otherwise related to the responses to these Interrogatories.
CONFIDENTIALPage 25 RESPONSE TO INTERROGATORY NO. 23:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order. Notwithstanding the foregoing
objections, BAM will produce all non-privileged documents that form the basis of a response
hereto, to the extent they are not identified in the responses to particular Interrogatories.
INTERROGATORY NO. 24:
Identify all Persons who provided information in response to these Interrogatories, and
describe in detail the information they provided.
RESPONSE TO INTERROGATORY NO. 24:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order. BAM further objects on the ground
that it calls for the disclosure of attorney-client privileged information and/or attorney work
product. In responding to this Interrogatory, BAM will not identify any counsel. Notwithstanding
the foregoing objections, BAM identifies Chase Garrity, Erik Kellogg, and Sara Sisenwein who
are submitting certifications herewith.
CONFIDENTIALPage 26 Dated: July 13,
Respectfully submitted,
/s/ William R. McLucas
William R. McLucas (pro hac vice pending)
Matthew T. Martens (D.C. Bar #1019099)
Matthew Beville (pro hac vice pending)
WILMER CUTLER PICKERING HALE
AND DORR LLP
2100 Pennsylvania Avenue NW
Washington, DC William.McLucas@wilmerhale.com
Matthew.Beville@wilmerhale.com
Matthew.Martens@wilmerhale.com
/s/ George S. Canellos
George S. Canellos (pro hac vice)
Adam J. Fee (pro hac vice)
Matthew J. Laroche (pro hac vice)
MILBANK LLP
55 Hudson Yards
New York, NY GCanellos@milbank.com
MLaroche@milbank.com
Andrew M. Leblanc (D.C. Bar #479445)
MILBANK LLP
1850 K Street, NW, Suite Washington, D.C. ALeblanc@milbank.com
Tiffany J. Smith (pro hac vice pending)
WILMER CUTLER PICKERING HALE
AND DORR LLP
7 World Trade Center
250 Greenwich Street
New York, NY Tiffany.Smith@wilmerhale.com
Attorneys for Defendants BAM Trading
Services Inc. and BAM Management Holdings
US Inc.
CONFIDENTIAL
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EXHIBIT 6
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
No. 1:23-cv-01599 (ABJ)
BINANCE HOLDINGS LIMITED,
BAM TRADING SERVICES INC.,
BAM MANAGEMENT US HOLDINGS INC.,
AND CHANGPENG ZHAO,
Defendants.
DEFENDANTS BAM TRADING SERVICES INC. AND BAM MANAGEMENT
US HOLDINGS INC.’S RESPONSES AND OBJECTIONS
TO PLAINTIFF’S FIRST SET OF INTERROGATORIES
Pursuant to Rules 26 and 33 of the Federal Rules of Civil Procedure and the Local Rules
of the United States District Court for the District of Columbia (the “Local Rules”), any order
entered in or applicable to the above-referenced litigation (the “Action”), or any other applicable
law or rule, Defendants BAM Trading Services Inc. and BAM Management US Holdings Inc.
(collectively, “BAM”) submit these responses and objections (the “Responses”) to Plaintiff’s First
Set of Interrogatories (collectively, the “Interrogatories” and each an “Interrogatory”), without
waiver of any objections or defenses that BAM asserts in these Responses, previously has asserted,
or hereafter may assert in this Action. Until a Protective Order is entered in this matter, these
Responses and the accompanying production are designated pursuant to the agreement
memorialized in email correspondence dated July 7, 2023.
GENERAL OBJECTIONS
These General Objections apply to the Interrogatories generally and to each Definition,
Instruction, and Interrogatory included in the Interrogatories. These General Objections are
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incorporated by reference as though set forth in full in the Responses and Objections to Specific
Interrogatories (the “Specific Responses”). Any objection to a Definition or Instruction shall also
apply equally to any other Definition, Instruction, or Interrogatory that incorporates that Definition
or Instruction. These General Objections are neither waived nor limited by the Specific Responses.
The fact that a General Objection is not specified in the Responses does not constitute a waiver of
that objection or otherwise preclude BAM from raising that objection at a later time.
1.
BAM objects to the Interrogatories and the Definitions and Instructions therein to
the extent that they seek or may be construed to impose burdens or obligations that are broader
than, inconsistent with, not authorized by, or otherwise impermissible under the Federal Rules of
Civil Procedure (“Federal Rules”), the Local Rules (including Local Civil Rule 26.2), the case law
interpreting them, the Consent Order entered in this matter of June 17, 2023 (Dkt. 71, hereinafter
“Consent Order”), any orders entered (or that may be entered) in this Action, or any other
potentially applicable rules or laws (collectively, the “Applicable Orders and Rules”).
2.
BAM objects to the Interrogatories to the extent that they are vague, ambiguous,
overbroad, lacking in particularity, and/or call for information beyond the relevant scope of or
disproportionate to the needs of the Consent Order, as well as to the extent that they are unduly
burdensome because they would impose a significant expense and inconvenience on BAM. By
agreeing to provide certain information, BAM does not concede that any of the Interrogatories
seeks information that is within the relevant scope of the Consent Order or otherwise is appropriate
for discovery in this Action.
3.
BAM objects to the Interrogatories, together with their accompanying Definitions
and Instructions, to the extent they purport to seek information that is unreasonably cumulative or
duplicative of one another or of other discovery requests or subpoenas that have been or may be
2
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served in this Action, including but not limited to the SEC’s First Set of Requests for Production
of Documents and Inspection to BAM, dated June 23, 2023 (the “RFPs”), and the Consent Order.
4.
BAM objects to the Interrogatories, together with their accompanying Definitions
and Instructions, to the extent they seek information that is obtainable from some other source that
is more convenient, less burdensome, or less expensive, or is publicly available, including but not
limited to (a) documents that have or will be produced to Plaintiff in this Action, (b) deposition
testimony in this Action, and (c) documents filed in this case.
5.
BAM objects to the Interrogatories to the extent that they seek information or legal
theories that are protected by the attorney-client privilege, the work-product doctrine, the jointdefense or common-interest privilege, domestic or foreign criminal or civil laws (including privacy
laws), or any other applicable privilege, immunity, or protection from discovery or disclosure
(“Protected Information”). Nothing contained in this Response is intended to be, nor shall in any
way be construed as, a waiver of any such privilege, immunity, or protection of any other grounds
for objecting to discovery or admissibility of such material, its subject matter, or the information
contained therein. The absence of an Objection to a specific Interrogatory on this ground is neither
intended, nor should be interpreted, as evidence that BAM does not object to an Interrogatory on
the basis of an applicable privilege, immunity, or protection. Inadvertent production of Protected
Information shall not constitute a waiver of any privilege, immunity, or protection or of any other
grounds for objecting to discovery or admissibility of such material, its subject matter, or the
information contained therein, nor shall such production constitute a waiver of BAM’s rights,
under any applicable protective order and the Applicable Orders and Rules, to (i) claw back and
seek the return of such materials, or (ii) object to its use at any stage of this Action or in any other
action or proceeding.
Further, if BAM at any time discovers that it disclosed Protected
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Information, the receiving party shall promptly undertake commercially reasonable efforts to
return to BAM, sequester, or destroy all copies of such information and documents, as set forth in
the Protective Order. In all events, such return, sequestration, destruction, and/or certification must
occur within ten (10) business days of receipt of the request, unless the parties agree otherwise.
6.
BAM objects to the Interrogatories to the extent that they purport to seek the
production of information that reflects (i) trade secrets; (ii) information that is otherwise
confidential, proprietary, commercially sensitive, or competitively significant to BAM or any
affiliate thereof, current and former directors, employees, consultants, clients, and/or customers of
BAM or any affiliate thereof; (iii) personal information of any present and/or former employee,
consultant, client, and/or customer of BAM or any affiliate thereof; and/or (iv) information that is
subject to other protective orders, non-disclosure agreements, or other confidentiality
undertakings.
7.
BAM objects to the Interrogatories to the extent that they assume the existence of
facts that do not exist or the occurrence of events that did not take place. By responding to an
Interrogatory, BAM does not accept or concede any assertions, definitions, technical descriptions,
express or implied characterizations, or assumptions contained therein, does not admit that any
factual predicate stated in the Interrogatories is accurate, and such response shall not constitute or
be construed as providing an admission concerning any of the Interrogatories.
8.
BAM objects to the Interrogatories to the extent that they are argumentative, lack
foundation, or incorporate allegations and assertions that are disputed, erroneous or irrelevant to
this Action. In responding and objecting to the Interrogatories, BAM does not admit or concede
the correctness of any such allegations or assertions.
4
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9.
BAM objects to the Interrogatories to the extent that they purport to require BAM
to draw legal conclusions or are predicated on legal conclusions or arguments. Subject to and
without waiver of its objections in this Response, BAM states that any written response or
provision of information in response to the Interrogatories is not intended to provide, and shall not
constitute or be construed as providing, a legal conclusion or admission.
10.
None of BAM’s Responses should be construed to prevent it from presenting
additional facts and evidence in support of its arguments or defenses at the appropriate stage of
this case.
11.
These Responses are being made after reasonable inquiry into the relevant facts,
and are based only upon the information and documents presently known to BAM. Further
investigation may reveal additional facts or information that could lead to additions to, changes in,
and/or variations from the Responses. Irrespective of whether BAM provides information in
response to the Interrogatories, BAM reserves the right (but does not assume the obligation) to (i)
revise, correct, supplement, amend, modify, or clarify the content of these Responses; (ii) provide
additional responsive information in the future; (iii) object to further discovery in this Action; (iv)
use or rely upon any information produced in this Action in any hearing, proceeding, or trial; (v)
use or rely upon subsequently discovered information or information omitted from this Response
as a result of mistake, error, oversight, or inadvertence in any hearing, proceeding, or trial; and (vi)
challenge the authenticity or admissibility of any information in any hearing, proceeding, or trial.
12.
Any undertaking to meet and confer regarding, search for, or provide information
in response to, any Interrogatory remains subject to the objections in this Response. If and to the
extent BAM were to undertake a search for information, such an undertaking is not intended to be,
and shall not be construed as, an admission that such information exists.
5
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OBJECTIONS TO DEFINITIONS AND INSTRUCTIONS
1.
BAM’s Responses and Objections to the Definitions and Instructions are
incorporated by reference in each and every Specific Response and Objection below and have the
same force and effect as if fully set forth therein. By responding to the Interrogatories with a
defined term, BAM is not by implication agreeing with any such definition.
2.
BAM objects to the Definitions, individually and collectively, and to any
Definition, Instruction, or Interrogatory that incorporates the Definitions, to the extent that they
are overbroad, unduly burdensome, vague, and ambiguous.
3.
BAM objects to the Definitions, individually and collectively, and to any
Definition, Instruction, or Interrogatory that incorporates the Definitions, to the extent that they
purport to impose obligations on BAM greater than, or different from, the obligations contained
in the Applicable Orders and Rules.
4.
BAM objects to the Instructions to the extent that they are vague and unduly
burdensome and purport to impose obligations on BAM that go beyond, or that are otherwise
inconsistent with, the Applicable Orders and Rules.
5.
BAM objects to Instruction No. 4 to the extent it requires BAM, for any entity
referenced in the Interrogatories, to be aware of that “entity’s parents, subsidiaries, affiliates,
predecessors, successors, officers, directors, employees, agents, partners, and independent
contractors, as well as aliases, code names, trade names, or business names used by, or formerly
used by, any of the foregoing.” BAM further objects to Instruction No. 4 as vague, ambiguous,
overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of
information within the relevant scope of the Consent Order.
6.
BAM objects to Instruction No. 5 to the extent it requires BAM, for any individual
referenced in the Interrogatories, to be aware of that “individual’s counsel, agents, representatives,
6
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or any other person or entity acting or purporting to act on his or her behalf.” BAM further objects
to Instruction No. 5 as vague, ambiguous, overly broad, unduly burdensome, and not reasonably
calculated to lead to the discovery of information within the relevant scope of the Consent Order.
7.
BAM objects to Definition No. 11 to the extent it refers to a “subpoena.” BAM
will interpret Definition No. 11 by replacing “subpoena was” with “Interrogatories were.”
8.
BAM objects to Definitions No. 13 and 14 as overly broad, unduly burdensome,
and inconsistent with the Applicable Orders and Rules. To the extent an Interrogatory uses the
terms “identify” or “identify and describe in detail,” BAM will respond completely and accurately
to the greatest extent possible, in accordance with its obligations under the Applicable Orders and
Rules. BAM will not otherwise apply the definitions of “identify” and “identify and describe in
detail.”
9.
BAM objects to the relevant time period set forth in Instruction No. 16 on the
grounds that the time period of November 1. 2022 to the present is overbroad, unduly burdensome,
and seeks information or documents beyond the relevant scope of and/or disproportionate to the
needs of the Consent Order.
10.
BAM objects to Instruction No. 17 to the extent it requires BAM, for any
knowledge, information, documents, or communications requested by the Interrogatories, to be
aware of knowledge, information, documents, or communications within the possession, care,
custody, or control of “Persons with whom you associate, including family members, friends,
business associates, attorneys, representatives, and agents.” BAM further objects to Instruction
No. 17 as vague, ambiguous, overly broad, unduly burdensome, and not reasonably calculated to
lead to the discovery of information within the relevant scope of the Consent Order.
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11.
BAM objects to Instruction No. 18 as overly broad, unduly burdensome, and
inconsistent with the Applicable Orders and Rules. Where BAM is unable to respond fully to any
Interrogatory, it will identify the information that it is able to provide and proposes meeting and
conferring with Plaintiff.
SPECIFIC RESPONSES AND OBJECTIONS
INTERROGATORY NO. 1:
Identify all Persons who have access to, possession, custody, or control of any Customer
Assets, the fiat or crypto assets of any of the BAM Entities, or any accounts or crypto asset wallets
holding Customer Assets or the fiat or crypto assets of the BAM Entities, including, but not limited
to, (i) their employment history, including job titles, during the last seven years, including whether
they have been employed, affiliated with, or otherwise received compensation from, any of the
BAM Entities, Binance Entities, or Zhao; (ii) their residence during the past three years and
physical location while working for any of the BAM Entities, Binance Entities, or Zhao; and (iii)
the time period and nature of their access, possession, custody, or control of Customer Assets, the
fiat or crypto assets of any of the BAM Entities, or any accounts or crypto asset wallets holding
Customer Assets or the fiat or crypto assets of the BAM Entities.
RESPONSE TO INTERROGATORY NO. 1:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; (ii) residences and physical
locations during the last three years; (iii) historical access, possession, custody, or control of
Customer Assets; and/or (iv) assets other than Customer Assets. BAM further objects to this
Interrogatory as vague and ambiguous on the ground that it seeks information on persons
“affiliated with” any of the BAM Entities, Binance Entities, or Zhao, and will interpret this
Interrogatory as if that phrase is not included.
Notwithstanding the foregoing objections, BAM refers Plaintiff to its Response to
Interrogatory No. 3.
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INTERROGATORY NO. 2:
Identify all Persons who have access to, possession, custody, or control of Private and
Administrative Keys or New Private and Administrative Keys or other software or protocols
Concerning the deposit, custody, control, security, transfer, segregation, or withdrawal of
Customer Crypto Assets, including, but not limited to, (i) their employment history, including job
titles, during the last seven years, including whether they have been employed, affiliated with, or
otherwise received compensation from any of the BAM Entities, Binance Entities, or Zhao; (ii)
their residence during the past three years and physical location while working for any of the BAM
Entities, Binance Entities, or Zhao; and (iii) the time period in which they held such Private and
administrative Private and Administrative Keys or New Private and Administrative Keys or other
software or protocols responsive to this Interrogatory. This response should include the date when
any Private and Administrative Key or New Private and Administrative Key holder who was a
former employee or in any way affiliated with any of the Binance Entities ended such employment
or affiliation and started employment with BAM Trading or BAM Management.
RESPONSE TO INTERROGATORY NO. 2:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; (ii) residences and physical
locations during the last three years; (iii) historical possession of the Private and Administrative
Keys; and (iv) the date on which employment or affiliation the Binance Entities was terminated.
BAM further objects to this Interrogatory as vague and ambiguous on the ground that it seeks
information on whether relevant persons “affiliated with” any of the BAM Entities, Binance
Entities, or Zhao, and will interpret this Interrogatory as if that phrase is not included. BAM further
objects to this Interrogatory on the ground that “other software or protocols” is vague and
ambiguous and will interpret this Interrogatory as though that phrase is not included.
Notwithstanding the foregoing objections, on the document bearing Bates No.
BAM_SEC_LIT_00000132, BAM identifies the BAM employees who previously had custody of
the Private and Administrative Keys, as well as the individuals who have custody of the New
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Private and Administrative Keys, their current BAM job title, whether they have been employed
by the Binance Entities or Zhao, and their current country of residence.
INTERROGATORY NO. 3:
Identify all Persons involved in, designated to, and/or having authority over the Treasury,
Clearing, Security, SecOps, Fraud & Risk, Legal, Compliance, CX, and Custody Partners Teams,
including the Persons associated with the following roles: Clearing Member, Clearing Lead,
Treasury Member, Treasury Lead, CISO/Security, CFO, VP/Treasury, CX Agent, Fraud/Risk
Member (see Binance.US Digital Asset & Custody Operations Policy at 4/18, 6/18 BTS00833839, at BTS00833841), or any other individual or entity that are otherwise involved in
the custody, control, security, clearing, settlement, deposits, transfer, withdrawals, movement,
segregation, restrictions, or other management of Customer Assets. The response should include,
but is not limited to, (i) their employment history, including job titles, over the last seven years,
including whether they have been employed by, affiliated with, or otherwise received
compensation from any of the BAM Entities, Binance Entities, or Zhao; and (ii) their residence
during the past three years and physical location while working for any of the BAM Entities,
Binance Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 3:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
concerning (i) employment histories over the last seven years; and (ii) residences and physical
locations during the last three years. BAM further objects to this Interrogatory as vague and
ambiguous to the extent that its seeks information on “any other individual or entity that are
otherwise involved in the custody, control, security, clearing, settlement, deposits, transfer,
withdrawals, movement, segregation, restrictions or other management of Customer Assets,” and
will interpret this Interrogatory as if that phrase is not included. BAM further objects to this
Interrogatory as vague and ambiguous on the ground that it seeks information on whether relevant
persons “affiliated with” any of the BAM Entities, Binance Entities, or Zhao, and will interpret
this Interrogatory as if that phrase is not included.
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Notwithstanding the foregoing objections, BAM is producing a spreadsheet bearing Bates
No. BAM_SEC_LIT_00000091 that identifies the individuals who presently have a role or
responsibility concerning the possession, custody, or control of Customer Assets, as well as their
current job title, whether they have been employed by the Binance Entities or Zhao, their current
country of residence, and whether they have a role under the Binance.US Digital Asset & Custody
Operations Policy. This list includes individuals who have roles related to the possession, custody,
or control of Customer Assets, even if they do not personally have the ability to approve any
transfers or movements of Customer Assets, either individually or as part of a quorum of other
BAM personnel. BAM also has a legal department that, as necessary, advises the personnel
identified on the foregoing spreadsheet concerning custody and control of Customer Assets, and
accounting and internal audit personnel who provide services related to Customer Assets.
Defendants BHL and Zhao do not have possession, custody, or control of any Customer Assets.
INTERROGATORY NO. 4:
Identify all BAM Trading and BAM Management officers, employees, and contractors, as
of the date of the filing of the SEC’s Complaint, ECF No. 1, including, but not limited to, (i) their
employment history, including job titles, during the last five years; (ii) any current or past
relationship or affiliation with any of the Binance Entities or Zhao; and (iii) their residence during
the past three years and physical location while working for any of the BAM Entities, Binance
Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 4:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order, including to the extent it seeks: (i)
information on BAM employees who do not have the ability to control Customer Assets; (ii)
employment histories over the last seven years; and (iii) residences and physical locations during
the last three years. BAM further objects to this Interrogatory as vague and ambiguous on the
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ground that it seeks information on “any current or past relationship or affiliation with any of the
Binance Entities or Zhao,” and will interpret this Interrogatory as if that phrase is not used. BAM
further objects to this Interrogatory to the extent that it seeks duplicative information, including
information contained in documents sought by other Interrogatories and the RFPs.
Notwithstanding the foregoing objections, BAM is producing a spreadsheet bearing Bates
No. BAM_SEC_LIT_00000092 that identifies BAM’s officers, employees, and contractors as of
the date of Plaintiff’s complaint, their job title, whether they have been employed by the Binance
Entities or Zhao, and the BAM Division within which they work.
INTERROGATORY NO. 5:
Identify any Persons with any equity or other ownership interest in BAM Trading and
BAM Management, and any changes to the ownership interests of the BAM Entities during the
relevant time period.
RESPONSE TO INTERROGATORY NO. 5:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order, including to the extent it seeks historical
information concerning BAM’s ownership interests. Notwithstanding the foregoing objections,
BAM refers Plaintiff to the documents reflecting BAM’s ownership interests at various points in
time, which was previously produced at BAM_SEC_LIT_00000067 through 00000071.
INTERROGATORY NO. 6:
Identify and describe in detail BAM Trading’s policies, procedures, protocols, and controls
for the possession, custody, control, transfer, movement, security, segregation, availability, and
any encumbrances or limitations of Customer Assets, including (i) the Person(s) involved in their
development, maintenance, performance, operation, and enforcement; and (ii) any changes in
those policies, procedures, protocols, and controls during the relevant time period.
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RESPONSE TO INTERROGATORY NO. 6:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning BAM’s policies, procedures, protocols, and controls concerning Customer
Assets. Notwithstanding the foregoing objections, BAM refers Plaintiff to its policies and
procedures produced in discovery and the Declaration of Erik Kellogg, dated June 12, 2023 (Dkt.
42; the “Kellogg Declaration”) and the Declaration Sara Sisenwein, dated June 12, 2023 (Dkt. 44;
the “Sisenwein Declaration”) concerning the possession, custody, and control of digital and fiat
assets, respectively.
With respect to Sisenwein Declaration, BAM provides the following updates: (i) since at
least the entry of the Consent Order, BAM’s banking partners are allowing users to withdraw funds
(Sisenwein Decl. ¶ 5); (ii) BAM ceased processing deposits of cash on or about June 13, 2023 and
will cease processing withdrawals of cash on or about July 20, 2023. The deadline for processing
withdrawals was extended because BAM’s banking partners were not permitting withdrawals for
a period of time, but have since reenabled withdrawals (id. ¶ 13); (iii) BAM no longer maintains
customer cash at Axos, Nuvei, Wyre, or Prime Trust (id. ¶¶ 15, 16); (iv) BAM customer fiat assets
are currently held at BitGo Trust Company Inc. (“BitGo”) and Orum Money Movement (“Orum”);
(v) BAM customers can no longer deposit cash with Orum but can withdraw cash via ACH until
on or about July 20, 2023 (id. ¶ 16(d); and (vi) BAM no longer has a banking relationship with
Wyre (id. ¶ 16(f)).
With respect to the Kellogg Declaration, BAM (i) refers the SEC to Mr. Kellogg’s
certifications dated June 29, 2023 and July 7, 2023 and to BAM’s Response to Interrogatory No.
2 (Kellogg Declaration ¶ 33(a)(i)); and notes that transfer requests are now sent to BAM personnel
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(not BHL personnel) who then issues the TSS-approval request (id. ¶ 33(c)(i)). BHL personnel no
longer have any role with respect to TSS-approval for BAM Customer Assets.
INTERROGATORY NO. 7:
Identify all crypto asset wallet addresses that are “white listed” for transfers to or from
crypto asset wallets holding Customer Assets, and describe in detail the process by which new
crypto asset wallets could be whitelisted, including, but not limited to, the identification of all
Persons involved in the whitelisting process, and their employment history over the last seven
years, including whether they have been employed by, affiliated with, or otherwise received
compensation from any of the BAM Entities, Binance Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 7:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks employment
histories over the last seven years and information concerning any compensation from any of the
BAM Entities, Binance Entities, or Zhao. BAM further objects to this Interrogatory as vague and
ambiguous on the ground that it seeks information on whether relevant persons “affiliated with”
any of the BAM Entities, Binance Entities, or Zhao, and will interpret this Interrogatory as if that
phrase is not included.
Notwithstanding the foregoing objections, a list of whitelisted wallet addresses is being
produced as BAM_SEC_LIT_0000093. The whitelisting process is described in the Kellogg
Declaration at paragraphs 3.b. and 36.b., except that the individuals involved in that process are
those that hold the New Private and Administrative Keys as identified in BAM’s Response to
Interrogatory No. 2.
INTERROGATORY NO. 8:
Identify all Documents, Communications, and other evidence to support your contention
that the Wallet Custody Agreement between Binance and BAM Trading was “never
operationalized” and “was never actually implemented and did not govern BAM’s custody
practices,” see, e.g., BAM Trading Opp. Br., ECF No. 40, at 13, including, but not limited to, all
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Documents, Communications, and other evidence you rely upon to rebut (i) BAM Trading’s
current CEO’s affirmation to BAM Trading’s auditors that Binance could “exert[] control over
any digital wallet holding either corporate or custodial digital assets held on [BAM Trading’s]
behalf,” see SEC TRO Mem., ECF No. 28, Ex. A-72, at pg. 4; id. Ex. A-73, at pg. 9; (ii) BAM
Trading’s financial statements stating that, at least until December 1, 2022, Customer Crypto
Assets and company crypto assets “were held in custody accounts through the Wallet Custody
Agreement.” Id. Ex. A-74, at BTS00833810; and (iii) counsel for BAM Trading’s submissions to
SEC staff that identified Binance as its custodian of crypto assets, see, e.g., BTS00042025, at
BTS00058738.
RESPONSE TO INTERROGATORY NO. 8:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
proposes that the parties continue to meet and confer regarding discovery requests related to the
Wallet Custody Agreement.
INTERROGATORY NO. 9:
Identify all Persons that have or had the role and responsibilities or otherwise performed
or continue to perform the services identified in the Wallet Custody Agreement, whether or not
such role, responsibilities, or services were pursuant to any formal agreement, including, but not
limited to, (i) the role, responsibility, and service(s) performed by such Person(s); and (ii) the
corresponding dates such Person(s) had such role or responsibility or performed such service(s).
RESPONSE TO INTERROGATORY NO. 9:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
intends to identify individuals who had roles with respect to wallet custody during the relevant
time period and proposes that the parties confer after BAM does so.
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INTERROGATORY NO. 10:
Identify all Documents and Communications Concerning internal or external audits of the
BAM Entities’ possession, custody, control, transfer or movement, security, segregation,
availability, and any encumbrances or limitations to its Customer Assets.
RESPONSE TO INTERROGATORY NO. 10:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning the custody and control of Customer Assets.
Notwithstanding the
foregoing objections, BAM proposes that the parties continue to meet and confer regarding
discovery requests concerning internal and external audits.
INTERROGATORY NO. 11:
Identify all Documents, Communications, or other evidence that the BAM Entities may
contend rebuts BAM Trading’s auditor’s finding in May 2022 that BAM Trading “is dependent
on the [Binance].com custodian to tell them the addresses holding the assets,” and that it “makes
it very difficult to ensure the Company is fully collateralized at specific points in time,” SEC TRO
Mem., Ex. A-89, at Armanino-BAM-000134, including whether You contend that the statement
was not true when the finding was made, and/or is not true today.
RESPONSE TO INTERROGATORY NO. 11:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about the custody and control of Customer Assets. Notwithstanding the foregoing
objections, BAM proposes that the parties continue to meet and confer regarding discovery
requests concerning internal and external audits.
INTERROGATORY NO. 12:
Identify and describe in detail the basis for the decision to maintain custody or control of
any Customer Assets, including Staking Assets, and any Private and Administrative Keys outside
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of the United States, including the Persons involved in such discussions and decisions, and their
employment history or any other relationship or agreement with any of the BAM Entities, Binance
Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 12:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about the custody and control of Customer Assets. Notwithstanding the foregoing
objections, BAM proposes that the parties meet and confer regarding this Interrogatory.
INTERROGATORY NO. 13:
Identify any Customer Assets or fiat or corporate assets of any of the BAM Entities,
including Private and Administrative Keys, that are held outside of the United States or controlled
by Persons outside of the United States, including, but not limited to, (i) the type of asset; (ii)
current value of the asset; (iii) where the asset is located; (iv) how it is held; (v) the name and
contact information of the Persons with custody and control of such assets;(vi) the relationship or
affiliation of such Persons with any of the BAM or Binance Entities; and (vii) the time period the
assets or keys have been outside of the United States.
RESPONSE TO INTERROGATORY NO. 13:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information about
the corporate assets of BAM Entities and historical information about Customer Assets.
Notwithstanding the foregoing objections, BAM responds that no Customer Assets, including
Private and Administrative Keys, are held outside of the United States or controlled by Persons
outside of the United States.
INTERROGATORY NO. 14:
Identify and describe in detail the role of any of the Binance Entities, including Sigma
Chain and Merit Peak, in the possession, custody, or control of Customer Assets.
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RESPONSE TO INTERROGATORY NO. 14:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets. BAM further objects to this Interrogatory to the extent
that it seeks duplicative information, including information provided by BAM to Plaintiff during
the investigation that preceded this Action. Notwithstanding the foregoing, BAM responds that
Merit Peak no longer operates on BAM’s platform, and Merit Peak and Sigma Chain do not have
a role in the possession, custody, or control of Customer Assets.
INTERROGATORY NO. 15:
Identify and describe in detail any agreement, relationship, affiliation, or association
between any of the Binance Entities and any Person with any access, possession, authority,
custody, or control of any Customer Assets, fiat or crypto assets of any of the BAM Entities, or
any account or wallet holding Customer Assets or the fiat or crypto assets of any of the BAM
Entities, including, but not limited to, the extent to which any of the Binance Entities or Zhao has
the authority over or the ability to direct or instruct such Persons.
RESPONSE TO INTERROGATORY NO. 15:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets or information unrelated to Customer Assets. BAM further
objects to this Interrogatory as vague and ambiguous on the ground that it seeks information on
the “relationships,” “affiliations,” or “associations” between any of the Binance Entities and any
Person with access, possession, authority, custody, or control of any Customer Assets or the fiat
or crypto assets of any of the BAM Entities. BAM further objects to this Interrogatory to the extent
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that it seeks duplicative information, including information sought by other Interrogatories and
information contained in documents sought by the RFPs.
Notwithstanding the foregoing objections, BAM responds that the Binance Entities and
Zhao do not have authority over or the ability to direct or instruct any Person with respect to the
custody or control of Customer Assets. BAM refers Plaintiff to its responses to Interrogatory Nos.
1 through 3 for more information on the Persons with custody or control of Customer Assets.
INTERROGATORY NO. 16:
For all crypto asset wallets associated with the BAM Entities or Binance.US trading
platform, identify each of the assets held in each wallet and the volume and the current value of
each asset (including the value of each asset in U.S. Dollars) held in each wallet.
RESPONSE TO INTERROGATORY NO. 16:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets. BAM further objects to this Interrogatory to the extent
that it seeks duplicative information, including information contained in documents sought by the
RFPs or required to be produced pursuant to the Consent Order. Notwithstanding the foregoing
objections, BAM refers Plaintiff to the materials produced on July 10, 2023 pursuant to Part IV of
the
Consent
Order
bearing
Bates
numbers
BAM_SEC_LIT_00000072
through
BAM_SEC_LIT_00000075.
INTERROGATORY NO. 17:
Identify and describe in detail all systems and Persons involved in the management of any
accounts, crypto asset wallets, Customer Assets, and fiat or crypto assets of the BAM Entities.
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RESPONSE TO INTERROGATORY NO. 17:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks information
unrelated to Customer Assets or historical information about Customer Assets. BAM further
objects to this Interrogatory as vague and ambiguous on the ground that it seeks information on all
systems and Persons “involved in the management” of any accounts, crypto asset wallets,
Customer Assets, and fiat or crypto assets of the BAM Entities. BAM further objects to this
Interrogatory to the extent that it seeks duplicative information, including information contained
in documents sought by the RFPs. Notwithstanding the foregoing objections, BAM refers Plaintiff
to its Responses to Interrogatory Nos. 1 through 3 and the Kellogg and Sisenwein Declarations, as
updated by the Responses to these Interrogatories.
INTERROGATORY NO. 18:
Identify and describe in detail all policies, procedures, protocols, and controls Concerning
or referenced in the Binance.US Digital Asset & Custody Operations Policy, including
identification of the Person(s) involved and their functions or roles.
RESPONSE TO INTERROGATORY NO. 18:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
identifies the Binance.US Cyber Risk Management Policy; Binance.US Digital Asset & Custody
Security Standard (in draft form); and Binance.US Security Vendor Management Policy, which
are
being
produced
pursuant
to
Bates
Nos.
BAM_SEC_LIT_0000094
through
BAM_SEC_LIT_00000130. As noted in prior productions, BAM is in the process of updating its
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policies in light of changes required by the Consent Order and will provide revised policies once
they are available. BAM refers Plaintiff to its Responses to Interrogatory Nos. 1 through 3 for
information on the Persons involved in the custody and control of Customer Assets.
INTERROGATORY NO. 19:
Identify and describe in detail how each category of Customer Assets – including Customer
Crypto Assets, Staking Assets, and Customer Fiat Assets – are segregated, including from any fiat
or crypto assets of the BAM Entities, Binance Entities, Zhao, or any other entity or individual.
RESPONSE TO INTERROGATORY NO. 19:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets. Notwithstanding the foregoing objections, BAM refers
Plaintiff to paragraphs 28 through 44 of the Kellogg Declaration for a discussion of Customer
Crypto Assets and Staking Assets, and paragraphs 3, 4, and 14 through 20 of the Sisenwein
Declaration for a discussion of Customer Fiat Assets, as updated by the Responses to these
Interrogatories.
INTERROGATORY NO. 20:
Identify and describe in detail the validators of the company’s staking program and BNB
blockchain, including any affiliation or other relationship they have with the Binance Entities, the
BAM Entities, or Zhao.
RESPONSE TO INTERROGATORY NO. 20:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets. BAM further objects to this Interrogatory as vague and
ambiguous because the scope of the request is unclear to the extent it refers to the “BNB
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blockchain.” BAM further objects to this Interrogatory as vague and ambiguous on the ground
that it seeks information on the validators of the company’s staking program, including “any
affiliation” they have with the Binance Entities, the BAM Entities, or Zhao, and will interpret this
Interrogatory as if that phrase is not used.
Notwithstanding the foregoing objections, BAM is producing a spreadsheet herewith
bearing Bates No. BAM_SEC_LIT_00000131 that identifies validators of BAM’s staking
program. Synclub is the only validator affiliated with the Binance Entities.
INTERROGATORY NO. 21:
Identify whether any BNB wallet, including the omnibus deposit wallet, is a smart contract.
RESPONSE TO INTERROGATORY NO. 21:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent that it seeks historical
information concerning Customer Assets.
Notwithstanding the foregoing objections, BAM
responds that the BAM BNB hot, cold, and deposit wallets are not smart contracts.
INTERROGATORY NO. 22:
For each blockchain for which the BAM Entities have any crypto asset wallets for company
crypto assets or Customer Assets, identify and describe in detail the following:
a. how the wallets were established;
b. the Person(s) who set up, maintain, have any access to, custody, or control over the
wallets;
c. how they are administrated and operated and by whom;
d. information about the coding and software that governs the wallets;
e. the Persons who hold the Private and Administrative Keys or New Private and
Administrative Keys;
f. how the keys are issued and held;
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g. the security or consensus protocol terms and other governing policies, procedures,
protocols, or controls;
h. the Persons with any authority or control to change the keys, any protocol that governs
any wallet, or any other authority, control, or access with respect to administration or
operation of the wallet;
i. the authority and role of any of the Binance Entities or Zhao with respect to access,
custody, control, administration, and operation of the wallets and Customer Assets,
including Concerning the deposit, transfer, custody, control, and withdrawal of
Customer Assets
RESPONSE TO INTERROGATORY NO. 22:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order to the extent it seeks historical
information about Customer Assets or information unrelated to Customer Assets. BAM further
objects to this Interrogatory to the extent that it seeks duplicative information, including
information sought by other Interrogatories and information contained in documents sought by the
RFPs.
Notwithstanding the foregoing objections, BAM refers Plaintiff to its Responses to
Interrogatory Nos. 1 through 3 and to the Kellogg Declaration. BAM also notes that it is required
to begin establishing new wallets pursuant to Part II, Paragraph 2 of the Consent Order. BAM also
states that BAM employees who possess the New Private and Administrative Keys have the
authority to establish or change the New Private and Administrative Keys. The Binance Entities
and Zhao do not have any authority or role with respect to the custody and control of Customer
Assets.
INTERROGATORY NO. 23:
Identify all Documents and Communications reviewed or relied upon in preparing the
response to these Interrogatories or otherwise related to the responses to these Interrogatories.
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RESPONSE TO INTERROGATORY NO. 23:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order. Notwithstanding the foregoing
objections, BAM will produce all non-privileged documents that form the basis of a response
hereto, to the extent they are not identified in the responses to particular Interrogatories.
INTERROGATORY NO. 24:
Identify all Persons who provided information in response to these Interrogatories, and
describe in detail the information they provided.
RESPONSE TO INTERROGATORY NO. 24:
In addition to BAM’s General Objections, BAM objects to this Interrogatory on the
grounds that it is overbroad, unduly burdensome, and seeks information not within the relevant
scope of or proportional to the needs of the Consent Order. BAM further objects on the ground
that it calls for the disclosure of attorney-client privileged information and/or attorney work
product. In responding to this Interrogatory, BAM will not identify any counsel. Notwithstanding
the foregoing objections, BAM identifies Chase Garrity, Erik Kellogg, and Sara Sisenwein who
are submitting certifications herewith.
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Dated: July 13, 2023
Respectfully submitted,
/s/ William R. McLucas
William R. McLucas (pro hac vice pending)
Matthew T. Martens (D.C. Bar #1019099)
Matthew Beville (pro hac vice pending)
WILMER CUTLER PICKERING HALE
AND DORR LLP
2100 Pennsylvania Avenue NW
Washington, DC 20037
William.McLucas@wilmerhale.com
Matthew.Beville@wilmerhale.com
Matthew.Martens@wilmerhale.com
/s/ George S. Canellos
George S. Canellos (pro hac vice)
Adam J. Fee (pro hac vice)
Matthew J. Laroche (pro hac vice)
MILBANK LLP
55 Hudson Yards
New York, NY 10001
GCanellos@milbank.com
MLaroche@milbank.com
Andrew M. Leblanc (D.C. Bar #479445)
MILBANK LLP
1850 K Street, NW, Suite 1100
Washington, D.C. 20003
ALeblanc@milbank.com
Tiffany J. Smith (pro hac vice pending)
WILMER CUTLER PICKERING HALE
AND DORR LLP
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Tiffany.Smith@wilmerhale.com
Attorneys for Defendants BAM Trading
Services Inc. and BAM Management Holdings
US Inc.
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