After the US Securities and Exchange Commission (SEC) sued Binance and founder Changpeng Zhao for allegedly violating federal securities laws, the firm's lawyers are now accusing SEC Chair Gary Gensler of offering to serve as an advisor to the crypto exchange in 2019.
On Monday, the SEC accused Binance and Zhao of operating a "scheme" to evade federal securities laws. In the complaint, the agency charged the company and Zhao with 13 offenses, including running an unregistered securities exchange, failing to restrict American customers from its platform, controlling customers' assets, and commingling and diverting customer funds.
SEC Chair Gary Gensler Allegedly Offered to be an Advisor for Binance
According to a new filing from Binance's legal team, Gary Gensler has offered to be an advisor to the crypto exchange while he was still teaching at Massachusetts Institute of Technology's Sloan School of Management.
CNBC reported that documents filed by the SEC on Wednesday showed that lawyers from Gibson Dunn and Latham & Watkins, two of the company's law firms, claimed that Gensler made his offer during his conversations with Binance executives and Zhao that happened several times in March 2019.
The filing alleged Gensler even met Zhao in Japan later that month to have lunch. Gensler was appointed by President Joe Biden in 2021 as the head of the SEC, and in the past months, he has already sued several crypto companies for allegedly selling unregistered securities.
Is Binance Trying to Prove a Conflict of Interest?
The Wall Street Journal reported that Binance's lawyers claimed that Gary Gensler was trying to cozy up with the company before he started going after the crypto firm.
But the report said the company's internal messages and a person close to Gensler suggested that it was Binance that approached Gensler. In the latest filing, Binance's lawyers noted that Zhao has managed to stay in touch with Gensler after their meeting in March 2019.
They said Zhao even agreed to sit down for an interview with Gensler after the future SEC chair requested it as part of a cryptocurrency course he was teaching at MIT. Due to Gensler's ties to Zhao, the company's attorneys asked for his recusal from any actions regarding the crypto firm.
Binance and the Problems It Faces Now
Binance had a lot of run-ins with the US government, and it mostly centered on the company's lack of licensed operations in the country. One significant case was with the Commodity Futures Trading Corporation (CFTC).
In March, the CFTC charged Binance with violating the Commodity Exchange Act (CEA) and CFTC regulations. The case centered on Binance encouraging US investors to use VPNs to hide their transactions from regulators.
In the past weeks, news about SEC investigating the world's largest cryptocurrency exchange had erupted, and it eventually turned into a case against the famed crypto company and its CEO, exposing details of a "scheme" by Binance to evade US regulation.
Related Article : SEC is Gunning for Binance and its CEO in a New Lawsuit-Law Evasion, Unlicensed Platform, and MORE
