In a surprising twist, lawyers for Binance and its founder Changpeng Zhao have revealed that SEC Chair Gary Gensler offered to be an advisor to the crypto exchange in 2019, when he was teaching at MIT. This comes amid a fierce legal battle between the SEC and Binance, which the regulator accuses of violating securities laws and deceiving investors.
According to a filing by Binance’s lawyers, Gensler reached out to Zhao via email in April 2019, expressing his interest in the crypto industry and offering his expertise as a former regulator and professor. He also suggested that he could help Binance with its regulatory strategy and compliance issues.
However, Zhao declined Gensler’s offer, saying that he was too busy and that Binance had enough advisors. He also said that he did not want to create any potential conflicts of interest or appearance of impropriety.
Binance’s lawyers argue that Gensler’s offer shows that he had a personal interest in the crypto exchange and that he may have harbored resentment or bias against Zhao for rejecting him. They also claim that Gensler’s current actions against Binance are motivated by his desire to boost his reputation and legacy as a tough regulator.
The SEC filed a lawsuit against Binance, Zhao, and several affiliated entities on June 5, alleging that they operated unregistered securities exchanges, broker-dealers, and clearing agencies; misled investors about their trading controls and oversight; commingled and diverted customer assets; and offered and sold unregistered securities, including Binance’s own tokens.
Binance denies the allegations and says that it has always complied with the law and cooperated with regulators. It also says that the SEC’s lawsuit is an attempt to stifle innovation and competition in the crypto space.
The case is expected to have significant implications for the crypto industry, as Binance is the largest and most influential crypto exchange in the world. The outcome could affect how other crypto platforms operate and interact with regulators in the U.S. and elsewhere.
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