Lawyers Revisit SEC’s Gensler Advisory Services to Binance in 2019
Binance exchange attorneys reveal that Gary Gensler provided advisory services to Binance. This happened years before assuming the chairperson role at the Securities and Exchange Commission (SEC).
Did Gensler Sue His Previous Advisory Clients?
According to attorneys representing both SEC and Changpeng Zhao, its founder, Gary Gensler, the United States SEC’S chair, once promised to serve as Binance’s advisor. A CNBC report dated June 7 and documents filed by the agency on the same date showed lawyers from Lathan & Watkins and Gibson & Dunn claiming that in March 2019, Gensler promised to be the exchange’s adviser.
Nevertheless, a March publication by The Wall Street Journal revealed that Binance’s initial approach to Gensler for the advisor role occurred in 2018. The Wall Street Journal (WSJ) quoted documents and messages from 2018 and 2020, showing that a meeting was held back in October 2018 to provide an advisory position. Those in attendance included Gensler, the then head of Binance’s investing arm Ella Zhang, and Koin Trading’s co-founder Harry Zhou.
Leading Private Organizations Courted Gensler While at MIT
Further, this report shows that several private organizations approached Gensler to be an advisor as he taught at the Massachusetts Institute of Technology (MIT). However, the offers were turned down. In February 2021, Gensler was nominated by U.S President Joe Biden to chair the Securities and Exchange Commission, and on April 17, 2021, he was sworn into office.
Before joining the Securities and Exchange Commission, Gensler was at the Massachusetts Institute of Technology (MIT) Sloan School of Management, where he served as a professor of the practice of global economics. Between 2017 and 2019, he headed the Maryland Financial Consumer Protection Commission.
SEC Initiates Lawsuit Against Binance
On June 5, Binance was sued by the Securities and Exchange Commission due to its failure to carry out operations unlawfully in the United States and to register as a securities exchange. The crypto exchange encountered 13 charges from the financial agency, including BNB tokens sales and unregistered offers.
Via its Chinese social media, Binance delivered a message on June 7 to declare that it differed from the rest of the crypto exchanges despite the high governing interventions encountered. According to the statement, the organization emphasized the transparency of its wallet addresses and that no client funds were siphoned. Further, Binance claimed that no significant donations were given to political candidates and no entertainment and media entities enjoyed major sponsorships. This is not a very cunning nod to practices that crypto exchange FTX harnessed.
Still, on June 7, Zhao used Twitter to spur a debate by pointing out that the Securities and Exchange Commission never sued FTX. This is despite Gensler’s claims that many parallels existed between the two organizations.
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