Binance once tried to hire current SEC Chair Gary Gensler to advise on regulations

March 6, 2023, 6:04 PM UTC
Crypto exchange Binance once asked now SEC Chair Gary Gensler to serve in an advising role for the company.
Rich Clement—Bloomberg via Getty Images

The world’s largest crypto exchange, Binance, is coming under increased scrutiny by Gary Gensler’s Securities and Exchange Commission, but just a few years ago the company tried to hire him.

In 2018 and 2019, after Gensler had left the Commodity Futures Trading Commission and was teaching at the Massachusetts Institute of Technology, Binance employees asked the future SEC chairman to consider an advising position with the company, according to the Wall Street Journal.

A former banker at Goldman Sachs, Gensler had spent five years at the CFTC and helped the agency play a more active role in enforcement after years of preaching about the benefits of the free market.

The former head of Binance’s venture investing arm, Ella Zhang, and Harry Zhou, an employee of a Bitcoin-trading company financed by Binance, met with Gensler in 2018. Gensler chose not to serve as an adviser to Binance but “was generous in sharing license strategies,” Zhou wrote in a private message viewed by the Journal.

Gensler was approached by several companies to be an adviser during his time at MIT from 2018 to 2021, but he rejected all of them, the Journal reported, citing a person familiar with the matter.

Binance and the SEC did not immediately respond to requests for comment from Fortune.

Binance was particularly interested in Gensler’s regulatory experience as it created Binance.US in 2019. 

Because of fears of a lawsuit by U.S. regulators, Binance created the company as a U.S.-based exchange that licensed Binance’s technology and name, and which would service U.S. customers but operate independently. Yet, private messages reviewed by the Journal show that the two companies were once more intertwined than the company originally claimed.

Texts from Binance.US employees and leadership reviewed by the Journal show that the company’s employees sometimes checked in with or sought approval from employees in Shanghai. In one case, an employee in Shanghai mistakenly turned on trading for Binance.US sooner than the team in the U.S. had planned, according to a text by Binance CEO Changpeng Zhao.

The report comes as Binance is reportedly preparing to pay penalties to settle U.S. regulatory and law enforcement investigations, according to the Journal. Although the size of the fines that could be handed down to Binance are unknown, the company is facing several probes—including by the Justice Department and the CFTC.

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