Reportedly Binance team tried to hire the current SEC Chairman Gary Gensler, to maintain a better relationship between Binance & regulatory bodies.
Binance is a top-ranked crypto exchange. This exchange was launched in July 2017 as a Chinese entity but later shifted company headquarters outside mainland China. To establish a crypto business in the United States, Binance launched a fully independent Crypto exchange Binance in Sep 2019. In the past couple of years, Binance faced allegations of strong financial & technical connections with BinanceUS.
On 5 March 2023, Wall Street Journal published a report on behalf of an old document of 2018 & 2020.
The report confirmed that Ella Zhang, then head of Binance’s venture investing arm, and Harry Zhou, co-founder of Binance-invested firm Koi Trading, met with Gensler in October 2018. At that time they wanted to hire Gensler as an advisor at the exchange.
The document noted that Zhou wrote in the chat:
“I observe that while Gensler declined advisor-ship, he was generous in sharing license strategies.”
In 2019, Binance CEO & founder Changpeng Zhao (CZ) met Gensler in Tokyo for a similar kind of purpose.
Reportedly, Gensler was approached by several private companies for better roles in establishing better relationships of the company with regulatory bodies but he rejected all the offers & joined the United States Securities and Exchange Commission (SEC) in April 2021. Before joining the SEC agency, Gensler was teaching at the Massachusetts Institute of Technology.
The report also highlighted that BinanceUS & Binance executives were already worried about the regulatory scrutiny citing the relationship between both exchanges. To fight against this challenge, executives established purely contractual agreements between both exchanges.
A Binance official reportedly responded to this report and said:
“When Binance.US was founded, there was an agreement with the Binance.com tech team to build out the tech infrastructure and provide other forms of 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.”