Binance tried to hire Gary Gensler in 2018 for closer ties with US regulators: Report

Crypto exchange Binance tried to hire Gary Gensler as an adviser before he became chairman of the US Securities and Exchange Commission (SEC). According to to a Wall Street Journal report based on communications and documents from 2018 and 2020, as well as interviews with former employees.

Gensler was approached by the crypto firm while teaching at the Massachusetts Institute of Technology (MIT) in 2018 and 2019. During this period, he was also the former chairman of the Commodity Futures Trading Commission.

Communications from Binance executives seen by the paper show that Ella Zhang, then head of Binance’s venture capital division, and Harry Zhou, co-founder of Binance-invested firm Koi Trading, met with Gensler in October 2018. After with Gensler declining the advisor position, Zhou wrote in the chat:

“I observe that while Gensler declined to be an advisor, he was generous in sharing licensing strategies.”

According to a Binance official, Gensler “will likely return to the regulator seat if the Democrats win the 2020 election.” The second meeting took place in March 2019 in Tokyo between Gensler and Binance founder Changpeng “CZ” Zhao. In April 2021, Gensler became chairman of the SEC.

According to the paper, Gensler was asked by numerous private companies to serve as an adviser while at MIT, which he declined.

The report highlights the relationship between Binance and its American branch, Binance.US. Fearing regulatory scrutiny, exchange executives took steps years ago to mitigate the risk, including creating a US entity to attract law enforcement and regulatory investigations, thus shielding Binance from regulatory oversight.

In a presentation titled “Isolate Binance from US Law Enforcement,” officials suggested that Binance have a “purely contractual” relationship with the US unit, positioning them as separate operations.

It has been reported that Binance preparing for fines and penalties to settle pending regulatory and law enforcement investigations in the United States. Binance Chief Strategy Officer Patrick Hillman said the firm is working with regulators to fix past compliance issues.

Binance did not immediately respond to Cointelegraph’s request for comment.