Benzinga - Securities and Exchange Commission (SEC) Chair Gary Gensler, who has been cracking down on crypto companies, allegedly offered to serve as an advisor to Binance’s parent company in 2019, according to lawyers representing Binance and its founder Changpeng Zhao.
What Happened: Documents filed by the SEC on Wednesday reveal that lawyers from Gibson Dunn and Latham & Watkins, two law firms representing Binance, allege that Gensler offered to serve as an advisor to the crypto exchange in several conversations with Binance executives and Zhao in March 2019, subsequently even meeting Zhao in Japan for lunch that month.
According to CNBC, Gensler was serving as a professor at the Massachusetts Institute of Technology's Sloan School of Management but then he was appointed head of the SEC in 2021 by President Joe Biden.
The SEC instigated legal proceedings against both Binance and Zhao on Monday, alleging multiple infractions of U.S. securities regulations. In response, Binance had issued a statement that said the SEC’s action was an attempt to rush to claim jurisdictional ground from other regulators and was devoid of any concerns for investors.
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Why It Matters: Binance’s lawyers have accused Gensler of attempting to cozy up to the company before his recent crackdown.
In the most recent filing, Gibson and Latham’s lawyers claim that Zhao continued to communicate with Gensler after their March meeting. Zhao also agreed to sit down for an interview with Gensler as part of a cryptocurrency course he was teaching at MIT.
According to the lawyers’ statement, Gensler was also slated to testify before the House Financial Services Committee in 2019, and he sent Zhao a copy of his prepared testimony before the hearing.
Binance’s lawyers claim to have requested Gensler’s recusal from actions against the company due to his ties with Zhao, but they have so far received no response from SEC officials.
Meanwhile, Coinbase CEO Brian Armstrong on Wednesday told CNBC that everything other than Bitcoin (CRYPTO: BTC) is a security, the SEC argues. But that’s not what the law says and that’s not the position that regulators from every other country around the world are taking.
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