Lawyers representing Binance and its founder Changpeng Zhao have claimed that SEC Chair Gary Gensler, who is currently leading a rigorous crackdown on cryptocurrency companies, offered to serve as an advisor to Binance’s parent company in 2019. According to documents filed by the SEC, Binance’s law firms, Gibson Dunn and Latham & Watkins, allege that Gensler had discussions with Binance executives and Zhao in March 2019, and later met with Zhao for lunch in Japan. At that time, Gensler was teaching at the Massachusetts Institute of Technology (MIT). He was appointed as the head of the SEC in 2021 and has since taken strong actions against the crypto industry, including filing lawsuits against several companies for allegedly selling unregistered securities.
The recent SEC filing includes information from Binance’s lawyers stating that Gensler had initially sought a favorable relationship with the company before turning against them. Earlier reports had already mentioned a relationship between Gensler and Binance based on internal messages from Binance and a source close to Gensler. The filing also reveals that Zhao maintained contact with Gensler after their meeting, including participating in an interview for a cryptocurrency course taught by Gensler at MIT.
The SEC recently filed 13 charges against Binance and Zhao, accusing them of failure to register as an exchange and broker-dealer, commingling funds, and lacking internal controls. Binance’s lawyers argue that Gensler should recuse himself from any actions involving the company due to his previous ties with Zhao. However, the SEC has stated that Gensler is fully compliant with his ethical obligations and any recusal requirements.
It’s worth noting that the SEC’s investigations into Binance. US and Binance began in 2020 and 2021, respectively, which is after the alleged last contact between Gensler and Zhao.