According to a Wall Street Journal investigation, crypto exchange Binance had tried to recruit Gary Gensler as an adviser before he was appointed chairman of the US Securities and Exchange Commission (SEC).
The WSJ also reported that the cryptocurrency firm approached Gensler, who had previously served as head of the US Commodities Futures Trading Commission (CFTC), in 2018 and 2019 while he was still a professor at the Massachusetts Institute of Technology.
According to Binance’s internal communications obtained by the Journal, Ella Zhang, head of Binance’s venture investing department, and Harry Zhou, co-founder of Binance-invested startup Koi Trading, met with Gensler in October 2018.
Although Gensler declined the offer, Zhou pointed out that the former Goldman Sachs investment banker was “generous in sharing license strategies.”
Later in March 2019, Gensler and Binance founder Changpeng “CZ” Zhao met in Tokyo. The encounter bore the same result.
The Journal also highlighted Binance’s relationship with its American subsidiary, Binance.US. According to the report, the exchange’s executives made efforts years ago to mitigate the possibility of regulatory scrutiny.
An official presentation titled “Insulate Binance from U.S. Enforcement” underlined that the U.S. branch of Binance should be treated as a separate entity from the main exchange and have a “purely contractual” connection with Binance.
Per a Binance representative, when Binance.US was established, an agreement was made with the Binance.com tech team to expand its tech infrastructure and provide other support for the new US-regulated exchange.
“It was a white-label service that supported other exchanges. That is why you’re seeing these old communications between members of the two organizations,” the representative told Cointelegraph.
Binance and Binance.US have the same owner, which has been public knowledge. However, the representative insisted that Binance has no customers in the U.S. and that the two companies are legally separate entities.
The exchange also acknowledged making mistakes but said they had been fixed during its expansion. Binance invested heavily in compliance expertise, procedures and technology in the last two years, which transformed the company’s compliance practices.