Binance’s Attempts to Hire SEC Chairman Gary Gensler as Advisor Revealed in WSJ Report
The Wall Street Journal recently reported that Binance, one of the world’s largest cryptocurrency exchanges, sought to hire Gary Gensler as an advisor before he became the chairman of the United States Securities and Exchange Commission (SEC). According to the report, Binance’s executives approached Gensler while he was teaching at the Massachusetts Institute of Technology (MIT) in 2018 and 2019, and held meetings with him in October 2018 and March 2019.
While Gensler declined the advisor position, Binance’s co-founder, Harry Zhou, reportedly wrote in a chat that Gensler was “generous in sharing license strategies.” The report also highlighted the relationship between Binance and its American arm, Binance.US, and how the exchange’s executives took steps to mitigate regulatory risk by setting up an American entity that would attract enforcement and regulatory inquiries, thereby shielding Binance from regulatory oversight.
A spokesperson for Binance responded to the report, saying that Binance.US was a white label service that supported other exchanges, and that it was a purely contractual relationship between the two entities. The spokesperson also noted that Binance and Binance.US shared the same ultimate beneficial owner, and that Binance did not have any US customers.
The report sheds light on the increasing scrutiny that cryptocurrency exchanges are facing from regulators and law enforcement agencies worldwide. Binance is reportedly preparing to face fines and penalties in order to settle outstanding regulatory and law-enforcement investigations in the United States. The exchange has also acknowledged that it made some missteps during its expansion, but has since invested heavily in compliance talent, processes, and technology over the past two years.
As cryptocurrency continues to grow in popularity, it’s clear that regulatory oversight will become increasingly important. While some exchanges may seek to elude regulatory authorities, the consequences of doing so could be severe. As Binance works to rectify its past compliance issues and cooperate with regulators, it remains to be seen how the exchange will navigate this rapidly evolving landscape.
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