Sigma Chain: CZ's proprietary market maker.

In the SEC's lawsuit against Binance, a mysterious market maker called Sigma Chain has emerged. The SEC alleges that most of Binance US's market-making activities were conducted through numerous accounts related to Sigma Chain. Sigma Chain is an active trader on the Binance platform and claims to be "Binance's primary market maker".

As early as a year ago, The Wall Street Journal reported that the SEC was investigating the relationship between two trading companies, Sigma Chain and Merit Peak, associated with Binance founder CZ and the Binance US platform.

Sigma Chain is a cryptocurrency trading company registered in Switzerland. CZ is the actual owner of Sigma Chain, and several Binance employees are responsible for its operation. Among them, Binance's logistics management personnel also serve as the president of Sigma Chain and have the signing authority for the bank account of BAM Trading Company (the actual operator of Binance US).

When Binance US was launched, CZ instructed Sigma Chain to become one of its first market makers. Sigma Chain has dozens of user accounts and uses them to provide liquidity to increase trading volume on the Binance US platform. In addition, since Binance US began offering over-the-counter (OTC) trading, conversion trading, and one-click buy/sell (OCBS) services to its customers, Sigma Chain has been a counterparty for Binance US platform customers, sometimes even the only one.

BAM, the actual operator of Binance US, knows that Sigma Chain has dozens of user accounts and is an active trader on the Binance US platform. For example, on June 23, 2020, when discussing the decrease in market maker trading volume on the Binance US platform, the CEO of BAM requested the sales director of BAM Trading to "extract (Sigma Chain) data and make them responsible... They should also be consistent with us - we can ask them to provide more trading volume, even though they previously accounted for 50% of our platform's trading volume." On January 6, 2021, the sales director of BAM Trading listed 20 accounts in a message sent to the CEO of BAM and other BAM employees, claiming that "these are all Sigma Chain".

According to statistics, at least 65 new cryptocurrencies listed on the Binance US platform have been market made by Sigma Chain. Between January 1, 2022 and June 23, 2022, Sigma Chain's account made markets for 48 of the 51 newly listed crypto assets.

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