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Allegations Against Gary Gensler for Alleged Offer to Advise Binance in 2019

Lawyers representing Binance have pointed fingers at Gary Gensler, the Chairperson of the SEC, accusing him of allegedly offering informal advisory services to the company. These assertions came to light through a communication addressed to the SEC, just prior to the regulatory body initiating legal action against Binance.

The legal representatives claim that Gensler engaged in discussions with Binance staff members and the Chief Executive Officer prior to assuming his position as the SEC Chair. They suggest that during a rendezvous in Japan back in 2019, there were deliberations between Gensler and the CEO related to Binance’s digital currency and the potential establishment of a U.S.-centered platform. The attorneys contend that Gensler’s past connections with Binance should have necessitated his disqualification from handling the matter. The SEC has not yet responded to these assertions.

These allegations were uncovered from records made public by the SEC in the context of its legal battle against Binance. The lawsuit points fingers at Binance for engaging in deceptive conduct, conflicts of interest, opacity, and skirting legal requirements.

This legal pursuit comes in the wake of a previous legal challenge launched by the Commodities and Futures Trading Commission in March, which leveled similar accusations against Binance for attempting to bypass U.S. securities statutes. Moreover, the SEC recently took legal action against Coinbase, the leading cryptocurrency exchange in the United States, over claims of operating without proper registration as a broker, national securities exchange, and clearing institution.

These legal proceedings directed at both Binance and Coinbase underscore the increasing scrutiny exercised by the U.S. government within the cryptocurrency domain. Since the events around FTX in November, the SEC has redirected its attention towards other significant participants in the field. The contentions raised by Binance’s legal counsel raise concerns regarding conflicts of interest and Gensler’s duties to abstain from certain matters.

Binance’s legal team contends that Gary Gensler, the Chair of the SEC, purportedly extended an offer to provide counsel to the company. These assertions have triggered inquiries into possible conflicts of interest, while the litigations against Binance and Coinbase underscore the growing regulatory focus on the cryptocurrency space.

Image Source: ANTON ZUBCHEVSKYI / Shutterstock

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