Lawyers claim SEC's Gensler volunteered to advise Binance in 2019

By: Dickson Arinze

Lawyers claim SEC's Gensler volunteered to advise Binance in 2019

June 8, 2023 8:00 AM

Gary Gensler allegedly offered his advisory services to Binance years before becoming chairman of the Securities and Exchange Commission.


According to lawyers for Binance and its founder Changpeng Zhao, US Securities and Exchange Commission Chair Gary Gensler once offered to serve as an adviser to Binance.


Documents submitted to the SEC on June 7 revealed that lawyers from Gibson & Dunn and Latham & Watkins claimed Gensler offered to act as an adviser to the exchange's board in March 2019. This was reported→ by CNBC on June 7.


However, according to a prior story→ from The Wall Street Journal in March, Binance approached Gensler first in 2018 for the post of consultant.


Messages and papers from 2018 and 2020 obtained by the WSJ→ indicate that in October of that year, Gensler was approached by Ella Zhang, the head of Binance's venture investing arm, and Harry Zhou, the co-founder of Binance-invested startup Koi Trading, about taking on an advising role. Later, Gensler declined the offer. 


Furthermore, the report states that many private corporations sought Gensler to serve as an advisor when he was teaching at MIT, but he turned down all of the offers.


In February 2021, Joe Biden, the US president, appointed Gensler as chairman of the SEC, and he was officially sworn in on the 17th of April 2021. 


He taught international business at the MIT Sloan School of Management before becoming an SEC commissioner. He chaired the Maryland Financial Consumer Protection Commission from 2017 to 2019.


Binance was charged with operating illegally in the United States and without being registered as a securities exchange by the SEC on June 5th. The financial authority filed 13 allegations against the cryptocurrency exchange, including unlawful sales and offers of both the BNB and Binance USD (BUSD) tokens, as well as its staking program.


On June 7, Binance announced on its Chinese social media channels that it was "different" from other cryptocurrency exchanges amid increased regulatory action against it.


Binance stated in the statement that its wallet addresses are transparent and that the exchange has never "siphoned consumers' funds." Furthermore, Binance stated that it never made "large donations" to political candidates or "large sponsorships" to entertainment and media groups, a not-so-subtle hint to the techniques employed by the now-defunct crypto exchange FTX. 


After Gensler claimed in an interview that there were many "parallels" between their company and FTX, Zhao provoked debate on Twitter by pointing out that the Securities and Exchange Commission (SEC) never charged FTX.