Would You like a feature Interview?
All Interviews are 100% FREE of Charge
Update (March 5, 9:22 PM UTC): This article has been updated with Binance’s response.
Cryptocurrency exchange Binance tried to hire Gary Gensler as an advisor before becoming chairman of the U.S. Securities and Exchange Commission (SEC). according to In a Wall Street Journal report based on 2018 and 2020 messages and documents and interviews with former employees.
Gensler was approached by a cryptocurrency firm while teaching at the Massachusetts Institute of Technology (MIT) in 2018 and 2019. During that time, he was also the former Chairman of the Commodity Futures Trading Commission.
According to a message from Binance executives obtained by the newspaper, Ella Chan, then head of Binance’s venture investment arm, and Harry Chow, co-founder of Binance-invested firm Koi Trading, announced their decision to invest in 2018. I met with Gensler in October. After Gensler turned down the advisory position, Zhou wrote in a chat:
“Mr Gensler declined the advisory role, but was generous in sharing the licensing strategy.”
According to a Binance employee, Gensler is “likely to return to the role of regulator if the Democrats win the 2020 election.” The second meeting took place in March 2019 in Tokyo between his Gensler and his Changpeng “CZ” Zhao, the founder of Binance. In April 2021, Gensler said he would become chairman of the SEC.
According to the newspaper, Gensler was asked by several private companies to advise him while he was at MIT, but he turned it down.
The report highlights the relationship between Binance and its American arm, Binance.US. Fearing regulatory scrutiny, exchange executives took steps a few years ago to mitigate the risks. This includes establishing an American entity that will attract inquiries from law enforcement and regulators and protect Binance from regulatory scrutiny.
In a presentation titled “Isolating Binance from U.S. Executions,” an employee suggested that Binance should have a “purely contractual” relationship with its U.S. units and position them as separate businesses. bottom.
A Binance spokesperson told Cointelegraph:
“When Binance.US was founded, there was an agreement with the technical team at Binance.com to build the technical infrastructure and provide other forms of support for the new US-regulated exchange. […] It was a white label service supporting other exchanges. So we see old correspondence between members of this two organizations of his. ”
The crypto exchange also noted that Binance and Binance.US “share the same ultimate beneficiary.” This is a commonly known fact from the beginning. “However, while Binance.US recently passed a funding round, Binance.com did not.”
Binance also realized that the two companies are separate legal entities, with no customers in the US. The exchange also recognized that it had made previous “mistakes” during its expansion.
“While growing at such a rapid pace, we made some early mistakes that we have now corrected. As a result of the significant investments we have made, the company today is very different when it comes to compliance.”
Binance is reportedly preparing to face fines and penalties for resolving outstanding regulatory and law enforcement investigations in the US. Binance Chief Strategy Officer Patrick Hillman said the company has been working with regulators to remedy past compliance issues. The company says its compliance and investigation headcount has increased by 500% in the last year.
