At the time Gensler was offered to be an advisor to Binance, he was teaching at Massachusetts Institute of Technology’s Sloan School of Management.
According to the lawyers of Binance and its CEO Changpeng Zhao, SEC chair Gary Gensler was offered to be an advisor to Binance’s parent company in 2019. Interestingly, Gensler has been spearheading the crackdown against the crypto industry over the past year. Binance and other crypto companies are currently under the radar of the US regulator over violations of securities laws. The SEC chair has repeatedly expressed his bearish stance against crypto and crypto companies. He said in March that just because a crypto trading platform claims to be a qualified custodian does not mean that it is.
SEC Chair Could Become an Advisor to Binance in 2019
The news of the offer to Gensler to serve as an adviser to Binance came to light in the wake of the recent filings against the company, which include violations of securities laws, flouting KYC rules, and more. Per the documents filed by the Commission on Wednesday, two law firms representing Binance, Gibson Dunn and Latham & Watkins, alleged that the SEC chair made the offer in several conversations with Binance executives and Zhao in March 2019. The filing added that Gensler also met the Binance CEO in Japan for lunch later in the same month.
At the time Gensler was offered to be an advisor to Binance, he was yet to be a boss at SEC. He was teaching at Massachusetts Institute of Technology’s Sloan School of Management. After then, President Joe Biden appointed him to head the Commission in 2021. However, Gensler has become hard on the crypto market, targeting numerous companies and slamming them with lawsuits over allegedly selling unregistered securities. It has been a dramatic week for the crypto industry as the SEC filed 13 charges against Binance and Zhao. The regulator claimed the company did not register as an exchange and broker-deal. It also alleged that Binance and Zhao put investors at risk to fund their own pockets.
Zhao-Gensler Relationship before SEC’s Crypto Crackdown
Furthermore, the lawyers said Zhao maintained contact with Gensler after the lunch meeting in March. Also, the Binance chief granted Genlser’s request by granting an interview as part of a crypto course he was teaching at MIT. Later in the year, the future SEC boss shared a copy of his intended testimony with Zhao. He was going to testify before the House Financial Services Committee. Testifying before the House over Facebook’s proposed but failed crypto Libra and the Calibra wallet, the MIT professor noted:
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies.”
After Gensler proposed the advisor idea in 2019 after which he reportedly met Zhao, SEC investigations and lawsuits against Binance US and Binance began in 2020 and 2020, respectively.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.