In an interesting twist of events, lawyers for Binance have revealed that current Securities and Exchange Commission (SEC) Chair Gary Gensler once had a close relationship with the exchange. In a letter, they claim that before his current role, Gensler “acknowledged the regulatory uncertainty around cryptocurrency and offered to serve as an advisor” to the popular cryptocurrency exchange. The question arises, could this history affect Gensler’s ability to objectively oversee the case involving Binance, and should he recuse himself?
The letter further details that in March 2019, Binance’s Changpeng “CZ” Zhao and Gensler had engaged in an in-person lunch meeting in Japan to discuss the BNB token and Binance opening an exchange in the U.S. The relationship between the two didn’t simply end there, as they reportedly remained in touch after their meeting. Zhao was under the impression that Gensler was “comfortable serving as an informal advisor,” a role that Gensler himself had allegedly offered.
Binance’s counsel argues that “Mr. Gensler should have been recused from any consideration in this matter based on this history and the prospect that Mr. Gensler may be a material fact witness.” However, there has been no confirmation from the SEC on whether Gensler has indeed recused himself or any explanation as to why he has not.
Adding fuel to the fire, the letter asserts that Gensler had approached multiple private firms, including Binance, to be an advisor. This information contradicts previous reports by the Wall Street Journal, which presented Gensler as being the one pitched by Binance to serve as an advisor.
The SEC, shortly after launching its lawsuit against Binance, filed for a temporary restraining order to freeze all assets on Binance.US. Both parties are due to return to court on June 13 regarding this order. Furthermore, the SEC has been directed by a court to respond to a petition from Coinbase concerning whether or not they will engage in rulemaking for cryptocurrency on June 14.
As the cryptocurrency world eagerly awaits outcomes of these court proceedings, it is essential to consider the potential impact of Gensler’s past relationship with Binance on the case. The situation casts a light on the blurred lines between regulators and the entities they need to regulate, underscoring the persistent uncertainty surrounding cryptocurrency regulations. Is a recusal in order, or can Gensler put aside his prior connections to conduct an impartial evaluation? Time will tell.
Source: Coindesk
