🇺🇸 Gary Gensler applied to serve as an advisor for #Binance in 2019 before becoming SEC Chair, court filing says.
— Walletor (@walletorapp) June 8, 2023
In documents filed with the SEC on Wednesday, lawyers from two of Binance’s law firms, Gibson Dunn and Latham & Watkins, say that Gensler met with Binance officials and Zhao in March 2019 and said he would be willing to advise the cryptocurrency exchange. Moreover, in the lawsuit, Gensler is said to have had lunch with Zhao in Japan that same month.
During this time, Gensler was a professor at the Sloan School of Management at the Massachusetts Institute of Technology. In 2021, President Biden appointed him as the head of the Securities and Exchange Commission (SEC). Since then, he has been very tough on the crypto industry, filing lawsuits against several companies for supposedly selling unregistered securities.
The SEC recently brought 13 charges against Binance and Zhao. They are accused of not registering as an exchange and broker-dealer, mishandling funds, and not having key internal controls. According to the lawyers, before Gensler started going after Binance, he was trying to build a close relationship with the exchange. The Wall Street Journal has written before about the link between Gensler and Binance, citing internal Binance texts and a person close to Gensler. Additionally, both of these sources said that Binance approached Gensler.
Gary Gensler Past Encounters
In a recent statement, lawyers from Gibson and Latham say that Zhao kept in touch with Gensler after they met in March. He asked Zhao to do an interview with him. The interview was part of a course on cryptocurrency that he was teaching at MIT. So Zhao agreed and attended the interview.
In a separate development, the SEC called Zhao a “foreign national” who has a reputation for being hard to find. Zhao’s lawyers are now saying that Zhao thought Gensler’s role was that of an informal advisor. Moreover, Gensler was going to appear before the House Financial Services Committee later in 2019. Before the hearing, he sent Zhao a draft of what he planned to say.
In July of the same year, Gensler testified before the House about Facebook’s planned cryptocurrency, Libra, and the Calibra wallet that was associated with it. However, later on, they canceled the cryptocurrency.
He said in his prepared statement, “I do not advise any financial, technology, blockchain, or other companies, nor do I own any cryptocurrencies.”
Gensler’s advice to regulators back then was the same as his public statements now. He stressed how important it was to have rules to protect customer funds from possible misuse by Calibra. This was important since Facebook was planning to make a wallet for keeping these assets.