Binance Attempted To Hire Gary Gensler For Closer Ties With U.S. Regulators 

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According to a Wall Street Journal report based on messages and documents from 2018 and 2020 and interviews with former employees, cryptocurrency exchange Binance sought to hire Gary Gensler as an advisor before he was elected chairman of the United States Securities and Exchange Commission (SEC).

While Gensler was a professor at the Massachusetts Institute of Technology (MIT) between 2018 and 2019, the crypto startup approached him. He had also served as the Commodities Futures Trading Commission chair at that time.

According to emails from Binance employees obtained by the newspaper, Gensler met with Ella Zhang, then-head of Binance’s venture investment division, and Harry Zhou, co-founder of Koi Trading, a company in which Binance has invested, in October 2018. After Gensler’s rejection of the adviser role, Zhou stated in the chat:

“I observe that while Gensler declined advisor-ship, he was generous in sharing license strategies.”

Gensler will “likely be back in a regulatory seat if Dems win the 2020 election,” according to a Binance employee. The second meeting between Gensler and Changpeng “CZ” Zhao, the creator of Binance, took place in Tokyo in March 2019. Gensler was appointed head of the SEC in April 2021.

The publication claims that while at MIT, Gensler was solicited by several private corporations to act as an advisor, but he turned them down.

The rapport between Binance and its US-based subsidiary, Binance.US, is highlighted in the study. Executives of the exchange took precautions to reduce the possibility of regulatory scrutiny years ago, including establishing an American corporation that would draw enforcement and regulatory attention, protecting Binance from regulatory inspection.

Employees proposed that Binance should have a “purely contractual” connection with the American unit, portraying them as different organizations, in a presentation titled “Insulate Binance from US Enforcement.”

According to reports, Binance is preparing to pay fines and penalties to resolve pending regulatory and law enforcement investigations in the United States. Chief Strategy Officer Patrick Hillmann of Binance stated that the company has been collaborating with regulators to address prior compliance difficulties.

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