Is Gary Gensler’s Crypto Crackdown the Result of Bad Blood?

In a shocking twist to the ongoing crackdown on crypto companies, it has come to light that SEC Chair Gary Gensler offered his services as an advisor to Binance’s parent company back in 2019. Attorneys representing Binance and its founder Changpeng Zhao (CZ) have filed documents claiming that Gensler had multiple conversations with Binance executives and Zhao. He expresses his interest in advising the crypto exchange in these conversations.

The alleged rendezvous went down on a lunch meeting in Japan. This revelation raises questions about Gensler’s previous relationship with Binance. Especially considering his current aggressive stance towards the crypto industry.

All this leads to the question – is all the crypto drama just another case of “If You Can’t Join Em, Beat Em“? Here’s what we know so far…

TL;DR

• SEC Chair Gary Gensler allegedly offered his advisory services to Binance’s parent company in 2019.
• Questions arise about Gensler’s relationship with Binance amidst his current aggressive stance on crypto.
• Binance’s legal team seeks Gensler’s removal from the case, citing potential conflicts of interest.

Gary Gensler Fights For His Misplaced Pride

At the time of these discussions, Gensler was a professor at the prestigious Massachusetts Institute of Technology’s Sloan School of Management. His appointment as the head of the SEC in 2021 by President Biden marked a significant shift in his approach. He embarked on a relentless pursuit of crypto companies, accusing them of selling unregistered securities and launching lawsuits against them.

The crypto community worldwide takes a stand against the SEC crackdown. The latest “Stand With Crypto” campaign rallies the web3 world in pursuit of a decentralized financial system.

Interestingly, before the SEC’s crackdown on Binance, Gensler made attempts to establish a closer relationship with the company. Insider information from internal Binance messages and a source close to Gensler suggests that it was Binance who initially approached him. This newfound revelation adds a touch of irony to the current situation

The Plot Thickens

According to the latest filing from Binance’s legal team at Gibson Dunn and Latham & Watkins, Zhao maintained contact with Gensler even after their March meeting. In fact, at Gensler’s request, Zhao even participated in an interview with him as part of a cryptocurrency course Gensler was teaching at MIT. It seems that Zhao understood Gensler to be acting as an informal advisor, which further blurs the lines of their relationship.

Curiously, in 2019, Gensler sent Zhao a copy of his intended testimony ahead of his appearance before the House Financial Services Committee, where he was slated to discuss Facebook’s controversial cryptocurrency Libra and its associated Calibra wallet. In his prepared testimony, Gensler explicitly stated, “I do not advise any financial, technology, blockchain, or other companies, nor do I own any cryptocurrencies.” This statement raises eyebrows, considering his alleged involvement with Binance at the time.

Will The Latest Revelations Help Binance At All?

Binance’s legal team argue that Gary Gensler should be disqualified from any involvement in their case due to his previous relationship and interactions with CZ. They believe that Gensler’s connection to Zhao makes him a potential witness with important information about the company. Binance’s counsel has specifically requested confirmation from the SEC staff regarding Gensler’s recusal. But they also claim their request has not been acknowledged thus far.

By demanding Gensler’s removal from the case, Binance‘s legal team aims to ensure a fair and unbiased evaluation of their situation. This highlights the need for transparency and the proper handling of potential conflicts of interest within regulatory proceedings.

The SEC, on the other hand, maintain that Gensler is fully compliant with his ethical obligations and any recusal requirements. It is important to note that the SEC’s investigations into Binance.US and Binance began in 2020 and 2021, respectively. These were well after Gensler’s alleged interactions with Zhao. Nonetheless, this unexpected revelation adds a layer of complexity to the ongoing battle between the SEC and Binance.

As the crypto industry continues to face regulatory scrutiny, the story of Gensler’s past connection to Binance serves as a reminder of the intricate web of relationships and interests that often exist behind the scenes. Only time will tell how this revelation will impact the ongoing legal proceedings and the broader crypto landscape. NFTEvening covers the story as it continues