• Binance approached US Securities and Exchange Commission chairman Gary Gensler in 2018 and 2019 to become an advisor for the firm.
• Gary Gensler declined the offer to become an advisor to Binance but was generous in sharing license strategies with Binance executives.
• The US crypto crackdown has been ramping up in recent weeks, with the SEC taking action against Kraken over its crypto staking service and accusing USD-backed Binance USD (BUSD) stablecoin issuer Paxos of issuing an unlicensed security.
Binance’s Efforts to Woo SEC Chairman
Binance approached US Securities and Exchange Commission (SEC) Chairman Gary Gensler in 2018 and 2019, offering him a role as an advisor for the company. At the time, Gensler was teaching at Massachusetts Institute of Technology (MIT) and had previously worked as chairman of Commodity Futures Trading Commission (CFTC). However, Gensler declined their offer to become an advisor. Nonetheless, he shared valuable license strategies with Binance executives.
The US crypto crackdown has been intensifying recently, with the SEC taking action against Kraken over its crypto staking service and accusing USD-backed Binance USD (BUSD) stablecoin issuer Paxos of issuing an unlicensed security. Reportedly, staff at the agency believe that Binance’s US subsidiary is operating as an unregistered securities exchange; however no enforcement action can take place without approval from majority of five commissioners at SEC.
Gensler’s Stance on Crypto Exchanges
Commission chair Gary Gensler believes that most cryptocurrency trading platforms should register as securities exchanges so they should follow appropriate disclosure and compliance regulations set by SEC.
Binance is one of the leading cryptocurrency exchanges worldwide which explains why it is fearful of possible prosecution by US authorities. It is important to note that any views expressed by staff members do not necessarily reflect those held by commissioners at SEC.
Binance sought out advice from the US regulator to ensure that it would be able to operate without fear of prosecution or any kind of regulatory backlash in future. Although Gary Gensler declined their offer, he was still generous enough to share his license strategies with other members at Binance which shows his commitment towards helping promote innovation within crypto space while also ensuring regulations are followed accordingly for investor protection purposes.