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SEC Chair Gensler Was Offered Advisory Role at Binance

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Sun, 5/03/2023 - 19:21
SEC Chair Gensler Was Offered Advisory Role at Binance
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Gary Gensler, the reigning chair of the U.S. Securities and Exchange Commission (SEC), was purportedly offered an advisory position at Binance in both 2018 and 2019, as indicated by internal messages inspected by The Wall Street Journal.

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Despite Gensler's refusal, he allegedly shared license strategies with the cryptocurrency behemoth.

This revelation emerges amid heightened scrutiny of Binance by American regulators, who are examining whether the exchange breached securities laws by enabling U.S. investors to conduct trades on its platform.

While Binance and its American affiliate, Binance.US, have persistently insisted that they are distinct entities, the internal communications obtained by the Journal seem to suggest otherwise.

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The messages show that Binance and Binance.US were "deeply intertwined," with staff, technology, and finances mixed between the two companies.

Binance.US's former CEO, who initially claimed the companies were "very separate," later asked staff to provide bullet points about their work that Binance CEO Changpeng Zhao and co-founder Wei Zhou should know about.

Additionally, a Binance executive suggested ways for the exchange to retain its largest U.S. clients, including having them use virtual private networks (VPNs) and offshore entities.

Binance also faced operational issues in its early days. Just before Binance.US went live, a Binance staffer in Shanghai accidentally turned on trading. When asked who did it, Binance CEO Changpeng Zhao reportedly responded, "a guy here in Shanghai, mistake operation."

The internal messages also reveal that Binance and Binance.US staff mingled at a retreat, with Binance.US's then-CEO asking staff to think about "your shackles (items of your job that require SH answers, access, approval, funding)." "SH" refers to Shanghai, according to a person familiar with the matter.

As for Gensler, his tenure at the SEC has been marked by increased scrutiny of the cryptocurrency industry. He has called for greater regulation of digital assets, arguing that they are often used to evade traditional financial rules.

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