Lawyers Claim SEC’s Gensler Proposed Advisory Role for Binance in 2019

Lawyers Claim SEC's Gensler Proposed Advisory Role for Binance in 2019

SEC’s Gensler Allegedly Offered to Advise Binance in 2019: Lawyers Claim

Lawyers representing Binance, a prominent crypto exchange, and its founder Changpeng Zhao have alleged that Gary Gensler, the Chair of the United States Securities and Commission (SEC), offered to serve as an adviser to Binance in 2019.

According to a June 7 CNBC report, documents filed by the SEC on June 7 indicated that attorneys from Gibson & Dunn and Latham & Watkins made the claim that Gensler proposed the advisory role to the exchange in March 2019.

However, a previous report from The Wall Street Journal in March suggested that it was actually Binance who approached Gensler first in 2018 regarding the advisory position.

The WSJ, citing messages and documents spanning from 2018 to 2020, stated that Ella Zhang, who was then the head of Binance’s venture investing arm, and Harry Zhou, co-founder of Binance-invested firm Koi Trading, had initially met with Gensler in October 2018 to offer him the advisory position. However, Gensler declined the offer.

Furthermore, the report revealed that multiple private companies had approached Gensler to serve as an advisor while he was teaching at MIT, but he declined all of those offers.

Gary Gensler was nominated by United States President Joe Biden to chair the SEC in February 2021 and was sworn into office on April 17, 2021. Prior to joining the SEC, he held the position of professor of the practice of global economics and management at the MIT Sloan School of Management. From 2017 to 2019, he also served as chair of the Maryland Financial Consumer Protection Commission.

The SEC filed a lawsuit against Binance on June 5, accusing the exchange of operating illegally in the U.S. and failing to register as a securities exchange. The regulatory body brought forth a total of 13 charges against the crypto exchange, including unregistered offers and sales of BNB (Binance Coin) and Binance USD tokens, as well as violations related to its staking program.

On June 7, Binance released a statement through its Chinese social media channels, asserting that it is “different” from other crypto exchanges in light of the increased regulatory scrutiny it is facing. The statement emphasized the transparency of Binance’s wallet addresses and claimed that the exchange has never misappropriated consumers’ funds. Additionally, Binance highlighted that it has not made significant political donations or sponsorships to entertainment and media entities, possibly alluding to practices associated with the now-defunct crypto exchange FTX.

On the same day, Changpeng Zhao, known as CZ, the CEO of Binance, sparked a debate on Twitter by pointing out that the SEC had not sued FTX, despite Gensler stating in an interview that there were several “parallels” between the two companies.