Gary Gensler, the current chairman of the U.S. Securities and Exchange Commission (SEC), reportedly took on an advisory position at Binance in 2018 and 2019, according to internal communications read by The Wall Street Journal.
Despite Gary Gensler’s rejection, he reportedly shared licensing strategies with the cryptocurrency leader. The discovery comes amid heightened scrutiny of Binance by U.S. regulators who are looking into whether the exchange has violated securities laws by allowing U.S. investors to trade on its platform.
While Binance and its US subsidiary, Binance.US, have always insisted that they are separate entities, internal communications received by the WSJ seem to suggest otherwise.
Reports show that Binance and Binance.US have been “deeply intertwined” with personnel, technology, and finance mixed between the two companies.
The former CEO of Binance.US, who initially claimed that the companies were “very separate,” then asked employees for information about their work that Changpeng Zhao, Binance CEO, and Wei Zhou, co-founder, should know.
In addition, the Binance executive suggested how the exchange could retain its largest U.S. customers, including forcing them to use virtual private networks (VPNs) and offshore companies.
Binance also faced operational issues in its early days. Shortly before the launch of Binance.US, a Binance employee in Shanghai accidentally activated trading. When asked who did it, Binance CEO Changpeng Zhao reportedly replied, “One guy here in Shanghai is mishandling.”
Internal messages also show that Binance and Binance.US staff participated in the workshop, with the then-CEO of Binance.US asking staff to think about “your roadblocks (elements of your work that require responses, access, approval, funding from SH).” “SH” refers to Shanghai, according to a person familiar with the matter.
As for Gary Gensler, his tenure with the SEC was marked by increased attention to the cryptocurrency industry. He called for stricter regulation of digital assets, arguing that they are often used to circumvent traditional financial rules.