UPDATED 11:55 EDT / JUNE 08 2023

BLOCKCHAIN

Binance attorneys say SEC Chair Gary Gensler offered to advise crypto company in 2019

The lawyers of Binance Holdings Ltd. have alleged that United States Securities and Exchange Commission Chair Gary Genser offered to be an adviser to the company prior to taking up his post at the SEC.

According to a report from CNBC on Wednesday, documents filed by the SEC indicated that attorneys from Gibson Dunn and Latham & Watkins, two firms working for Binance, claimed that Gensler offered to serve as an adviser for Binance, the world’s largest crypto exchange, in March 2019. They went on to say that he met with Zhao in Japan that month.

Prior to joining the SEC, Gensler was a professor at MIT teaching the practice of global economics and management at the Sloan School of Management. During that time, Binance’s attorneys said, after he met with Zhao he maintained his relationship and was scheduled to provide testimony before the House Financial Services Committee in July 2019. Before the hearing, he forwarded a copy of his planned statement to Zhao for advice, the letter said.

His comments during that hearing did not differ substantially from his current stance on cryptocurrency. “We must guard against illicit activities, such as tax evasion, money laundering, terrorist financing and avoiding sanctions,” he told lawmakers. “We must protect individuals’ privacy.”

Gensler was nominated by President Biden to the SEC in February 2021 and appointed SEC chair in April 2021.

Gensler and the SEC have been part of broad enforcement actions against crypto companies during the past year, cracking down on what the regulatory agency calls illegal behaviors. This week the SEC filed 13 charges against Binance and Zhao claiming the company did not register as an exchange and broker-dealer, as well as violating U.S. securities laws.

Binance’s lawyers have asked that Gensler recuse himself from the case because of his relationship with Zhao. “Mr. Gensler should have been recused from any consideration in this matter based on this history and the prospect that Mr. Gensler may be a material fact witness,” Binance’s lawyers wrote.

However, in March the Wall Street Journal reported that it was Binance that had approached Gensler first in 2018. According to messages viewed by the Journal between 2018 and 2020, he met with Ella Zhang, who was then head of Binance’s venture arm, and Harry Zhou, co-founder of Koi Trading. Gensler declined the offer. The report from the Journal went on to say that he was also approached by multiple private companies to serve as an adviser and declined all their offers.

Over the past year, Gensler and the SEC have brought charges against numerous crypto industry companies for allegedly breaking securities laws, including Coinbase Global Inc., the largest domestic crypto exchange, claiming it’s operating an unregistered exchange. The SEC has also recently sued the cryptocurrency exchanges Bittrex Inc., Genesis Global Capital LLC, Gemini Trust Co. LLC, Nexo Inc. and the “algorithmic” stablecoin issuer Terraform Labs Pte. Ltd. and its founder Do Kwon, to name a few.

Image: Pixabay

A message from John Furrier, co-founder of SiliconANGLE:

Support our mission to keep content open and free by engaging with theCUBE community. Join theCUBE’s Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities.

  • 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more
  • 11.4k+ theCUBE alumni — Connect with more than 11,400 tech and business leaders shaping the future through a unique trusted-based network.
About SiliconANGLE Media
SiliconANGLE Media is a recognized leader in digital media innovation, uniting breakthrough technology, strategic insights and real-time audience engagement. As the parent company of SiliconANGLE, theCUBE Network, theCUBE Research, CUBE365, theCUBE AI and theCUBE SuperStudios — with flagship locations in Silicon Valley and the New York Stock Exchange — SiliconANGLE Media operates at the intersection of media, technology and AI.

Founded by tech visionaries John Furrier and Dave Vellante, SiliconANGLE Media has built a dynamic ecosystem of industry-leading digital media brands that reach 15+ million elite tech professionals. Our new proprietary theCUBE AI Video Cloud is breaking ground in audience interaction, leveraging theCUBEai.com neural network to help technology companies make data-driven decisions and stay at the forefront of industry conversations.