In a report by Wall Street Journal, the world’s largest crypto exchange Binance has allegedly devised plans to circumvent US regulations. One of them even included hiring SEC chair Gary Gensler as an adviser before he became chairman of the United States Securities and Exchange Commission.
The explosive revelation was taken from messages, interviews, and documents from the platform’s former execs’ during 2018 and 2020, WSJ claimed.
Gensler, while he was teaching at the Massachusetts Institute of Technology, was approached by Ella Zhang, then head of Binance’s venture investing arm, and Harry Zhou, co-founder of firm Koi Trading, the Journal reported.
After Gensler turned down the advisor position, Zhou, according to a former employee, wrote in the chat that the former would be “likely back in a regulators seat if Dems win the 2020 election.”
The second meeting between Gensler and Changpeng “CZ” Zhao, the CEO of Binance, took place in Tokyo in March 2019. Gensler was appointed chair of the SEC in April 2021.
The report also revealed Binance’s strategy for avoiding regulatory scrutiny in the United States, which involved creating a minimally functional American platform called Binance.US that would license the firm’s intellectual property and brand but otherwise present as completely separate from it.
Binance And Its US Platform Has More Deeper Connections- WSJ
“But the entities have been much more intertwined than the companies have disclosed, mixing staff and finances and sharing an affiliated entity that bought and sold cryptocurrencies,” WSJ stated.
These alleged links if proven would put the trading platform and its billionaire founder and chief executive, Changpeng Zhao, as well as his undisclosed finances under closer scrutiny.
A Texas financial regulator recently said in a court filing that Binance.US was denied a license to operate in the state because its major shareholder, Mr. Zhao, refused to give financial details.
Both Binance and its CEO Changpeng Zhao had not replied to the accusations as of the time this story was being written.
The developments come at a time when various senators have called out Binance.US for engaging in “potentially illegal” activity and asked the firm to answer several questions.
Previously reported by TronWeekly, U.S Sens. Elizabeth Warren (D., Mass.), Chris Van Hollen (D., Md.), and Roger Marshall (R., Kan.) sent a letter to C.Z and his top U.S. deputy, Brian Shroder, requesting various documents from the exchange, including balance sheets from 2017 to the present.