Binance Lawyers Allege SEC Chair’s Offer To Advise In 2019

In a surprising turn of events, lawyers representing Binance, the popular cryptocurrency exchange, have made a startling claim in a recent filing, alleging that Securities and Exchange Commission (SEC) Chair Gary Gensler offered to serve as an advisor to Binance’s parent company back in 2019. This revelation comes at a time when Gensler has been actively cracking down on the crypto industry, leading to questions about the motivations behind the SEC’s actions and the consistency of Gensler’s regulatory approach.

Binance lawyers for the crypto exchange have alleged that SEC chair Gary Gensler offered to serve as an advisor to the exchange's parent company in 2019https://t.co/G8nxfxsSZ6

— crypto.news (@itscrypto_news) June 8, 2023

Binance’s Legal Filing

According to the documents filed by Binance’s legal representatives, law firms Gibson Dunn and Latham & Watkins, Gensler had multiple conversations with Binance executives and founder Changpeng Zhao in March 2019. The lawyers assert that Gensler even met Zhao for lunch in Japan later that month, during which Gensler was teaching at the Massachusetts Institute of Technology’s Sloan School of Management.

This isn’t the first time the relationship between Gensler and Binance has come under scrutiny. The Wall Street Journal had previously reported on internal Binance messages and a source close to Gensler, suggesting that Binance had approached the SEC chair. However, the recent filing reveals that Gensler maintained contact with Zhao even after their initial meeting. Zhao even participated in an interview with Gensler as part of a cryptocurrency course the SEC chair was teaching at MIT.

Interestingly, in 2019, Gensler shared a copy of his intended testimony with Zhao prior to his appearance before the House Financial Services Committee. During the hearing, Gensler emphasized that he did not advise any financial or technology companies and did not own any cryptocurrencies. His testimony primarily focused on the importance of regulations to combat illicit activities such as tax evasion, money laundering, and terrorist financing.

🚨BREAKING: SEC's Gary Gensler applied to serve as an advisor for Binance in 2019

So…

2019: He applies to become an advisor to Binance
2019: He is rejected (my guess)
2021: He becomes the SEC's chairman
2022: Says that Binance "is operating illegally in the US"
2023: SEC… pic.twitter.com/rMDqk08kYJ

— Mario Nawfal (@MarioNawfal) June 7, 2023

Binance’s lawyers have requested Gensler’s recusal from any actions related to the company due to his ties to Zhao. However, they claim to have received no acknowledgment from SEC staff regarding this request.

The SEC initiated investigations into Binance.US and Binance in 2020 and 2021, respectively, after Gensler’s alleged contact with Zhao. The timing of the agency’s enforcement action and the nature of Gensler’s involvement with Binance raise questions about their correlation.

These allegations by Binance’s legal team add an intriguing twist to the ongoing regulatory crackdown on the cryptocurrency exchange. Gensler, who is now leading the SEC’s offensive against the industry, had reportedly shown interest in advising Binance in the past. This raises concerns about the motives driving the SEC’s actions and the consistency of Gensler’s approach to crypto market regulation.