CNBC reports that lawyers in Binance’s securities case claim that SEC Chairman Gary Gensler once offered to serve as an advisor to their company. June 7,
Gensler Meets With CZ, Offers To Act As Binance Advisor
The US Securities and Exchange Commission (SEC) sued Binance on June 5 over alleged securities violations. Now, CNBC has obtained a filing in which Binance lawyers suggest Gensler offered to serve as an advisor to Binance’s parent company.
Reportedly, Gensler and Binance executives discussed the possibility extensively in March 2019, and Gensler met Binance CEO Zhao for lunch in Japan later that month.
After this both remained in contact. Zhao later took part in an interview about a cryptocurrency course that Gensler previously taught at MIT. Additionally, when Gensler testified before the House Financial Services Committee in 2019 about Facebook’s Libra cryptocurrency, he sent a copy of his remarks to Zhao.
Previous reports from the Wall Street Journal, cited by CNBC, suggested that Binance executives approached Gensler in early 2018 to serve as an advisor.
Is there a conflict of interest?
Gensler’s seemingly extensive ties to Zhao and Binance prompted Binance’s lawyers to reconsider prior to the current case — meaning Gensler would need to remain unaffiliated in any SEC action against Binance due to conflict of interest. Will be
However, Binance never received a response when originally asked for a denial. Furthermore, the SEC reportedly did not begin its investigation into Binance until 2020 — months after Zhao and Gensler allegedly had last contact.
The SEC doesn’t seem to have a problem. The agency told CNBC that Gensler is “familiar with the ethical obligations involved and (in) full compliance with its ethical obligations.”
Gensler’s prior involvement in the cryptocurrency industry has already been noted. His apparent endorsement of Algorand in April 2023 attracted attention. The relationship between Gensler and FTX affiliates, although tangential, is also raised.