After the SEC filed a lawsuit against Binance, the latter in recent hours revealed that Gary Gensler, chairman of the Securities and Exchange Commission, had applied for the role of advisor to the crypto exchange.
Full details follow.
Summary
Binance’s lawsuit against Gary Gensler
In the midst of the lawsuit between Binance and the SEC, lawyers for the cryptocurrency exchange have claimed something that has left many people surprised.
Specifically, they allege that SEC Chairman Gary Gensler offered to be an advisor to Binance in 2019.
This allegation has left everyone a bit stunned, considering, among the latest, the ongoing lawsuit involving Gensler’s recent stances towards the cryptocurrency industry.
In any case, according to Binance’s lawyers, Gensler was teaching at the Massachusetts Institute of Technology’s Sloan School of Management at the time of his application.
Documents filed by the SEC Wednesday during the lawsuit report allegations from the law firms Gibson Dunn and Latham & Watkins, which represent Binance.
According to the documents, Gensler allegedly offered his services as a consultant to the cryptocurrency exchange in several conversations that took place in March 2019 with Binance founder Changpeng Zhao and other company executives.
Eventually, he allegedly met with Zhao in Japan for lunch at the end of the month, as added in the document submission. In any case, it appears that the charges go far beyond that.
In fact, the lawyers claim that Changpeng Zhao maintained continuous contact with Gensler after their meeting in March 2019.
Moreover, it appears that at the time, at the request of the future SEC chairman, Zhao participated in an interview with Gensler as part of a course on cryptocurrencies taught at MIT.
According to the submitted documents, during 2019 Gensler was scheduled to testify before the House Financial Services Committee. He allegedly sent a copy of his scheduled testimony to Zhao before the hearing.
Neither Zhao nor Gensler have yet made public statements regarding these new details. However, this new revelation adds one more element to the ongoing battle between Binance and the SEC.
The SEC and the motion to freeze crypto held by Binance.US
As part of the SEC’s attack on Binance, in recent days the Securities and Exchange Commission filed a motion to freeze assets from the Binance.US exchange with a temporary restraining order.
In this regard, a judicial filing has been submitted to the US District Court in Washington, DC, seeking approval to freeze assets associated with BAM Management US Holdings and BAM Trading Services.
Entities representing the management and operation companies of Binance.US. This request follows the initiation of the official lawsuit filed by the SEC against Binance on Monday. We see that, specifically, in the filing the SEC states the following:
“The SEC respectfully argues that this relief is needed on an expedited basis to ensure the safety of clients’ assets and prevent the dissipation of assets available to any judgment, given Defendants’ years of violated conduct, failure to comply with United States laws, evasion of regulatory oversight and open questions on various financial transfers and the custody and control of client assets – including by defendants who claim they are not subject to the jurisdiction of the Court – as described in the complaint, memorandum of law and in the materials of support.”
Accordingly, if the court grants the order, in the next five days, Binance will be required to ensure that only Binance.US has access to customer funds. In addition, within 30 days, all customer assets will be transferred to new wallets that only Binance.US will have access to.
The US court subpoena on Changpeng Zhao
On 7 June, the US District Court for Washington, DC, issued a summons to Binance CEO Changpeng Zhao, who was given a 21-day period to respond to the summons he received.
The summons refers to the lawsuit filed against him in connection with the recent SEC action. At present, there are no details available on the official notice.
In addition, although it has not yet been confirmed whether the document has been served, once served it will begin the stipulated time period.
The document states that if Zhao does not respond, a default judgment will be entered against him for the claims expressed in the complaint.
Binance has yet to respond to the subpoena, but has already responded to the action taken by the SEC, stating that it will fight the allegations against them.
Coinbase also filed a similar complaint, although it did not include allegations of mismanagement of customer funds.
