• Binance approached US Securities and Exchange Commission chairman Gary Gensler in 2018 and 2019 to become an advisor for the firm.
• Gensler declined the offer but provided license strategies with Binance executives.
• The SEC has been ramping up its crypto crackdown, with staff believing that Binance.US is illegally operating as an unregistered securities exchange.
Binance’s Efforts to Woo SEC Chairman
Binance approached Gary Gensler, the current Chairman of the US Securities and Exchange Commission (SEC), in 2018 and 2019 in order to become an advisor for the firm. Gensler was teaching at Massachusetts Institute of Technology (MIT) at the time and had previously worked as Chairman of the CFTC.
Gensler’s Response
Gensler declined the offer from Binance to become an advisor, however he did provide “license strategies” with Binance executives according to Harry Zhou who met with him in October 2018 alongside Ella Zhang who was then head of Binance’s venture capital division. Additionally, a video call was held between Gensler and Changpeng Zhao, founder of Binance, in March 2019 where Gensler interviewed him for a cryptocurrency course based at MIT which he would be teaching starting summer 2019.
Ramp Up of Crypto Crackdown
The US crypto crackdown has been increasing recently with recent actions taken against Kraken over their crypto staking service and accusations towards USD-backed stablecoin issuer Paxos for issuing an unlicensed security. Additionally there have been reports from recent weeks claiming that staff at the agency believe that Binance’s US branch is operating as an unregistered securities exchange without following necessary compliance guidelines set by SEC regulations.
Fear Of Prosecution
It is thought that these efforts made by Binance were put into place out of fear of potential criminal prosecution due to messages sent between 2018-2020 uncovered by Wall Street Journal bombshell report published on Sunday claiming that they embarked on a campaign to “neutralize” US authorities as a precautionary measure.
Dominant Exchange
Despite concerns surrounding regulatory issues, it cannot be denied that Binance is still far and away one of the largest exchanges globally dominating trading volume since 2017 handling around $11 billion daily during January 2021 alone according to data from CoinMarketCap .
