In a surprising turn of events, Binance's legal team has put forth claims suggesting that Gary Gensler, the current chair of the U.S. Securities and Exchange Commission (SEC), had once expressed a desire to serve as an advisor to the cryptocurrency exchange back in 2019. This revelation has raised ethical concerns and adds a new layer of complexity to the legal battle between Binance and the SEC.
Legal representatives from Gibson Dunn and Latham & Watkins, acting as the defense for Binance, have asserted that Gensler engaged in discussions with the exchange's executives in March 2019, during a period when he held a teaching position at the prestigious Massachusetts Institute of Technology (MIT). These alleged talks coincided with Gensler's involvement in a blockchain seminar, where he highlighted the potential of the crypto network Algorand.
According to the lawyers, Gensler even had a personal meeting with Changpeng Zhao (CZ), the founder of Binance, during which they dined together in Japan. Despite Gensler not yet assuming his role as SEC chair, the connection between him and Binance did not end there. The legal team claims that Gensler and CZ maintained communication after their encounter.
In response to these allegations, the SEC addressed the issue, reassuring the public that Gensler is fully aware of his ethical obligations. The agency made a statement to CNBC, stating, "Chair Gensler is very familiar with and in full compliance with his ethical obligations, including any recusal obligations." This statement implies that Gensler has taken the necessary steps to ensure that any potential conflicts of interest are appropriately addressed.
It is worth noting that Gensler has faced similar accusations in the past. Ripple's chief legal officer, Stuart Alderoty, voiced concerns about Gensler's impartiality in a prior interview with New York Magazine's Intelligencer reporter Ankush Khardori. Alderoty argued that Gensler should recuse himself from voting on any enforcement case that pertains to the matter in question, as he believed that the SEC chair had already formed a biased opinion.
Moreover, Gensler's perceived endorsement of Algorand (ALGO) has drawn criticism from the cryptocurrency community. In a video recorded during his time at MIT, Gensler referred to Algorand as a "great technology" and proposed its potential application in a system similar to Uber. Many interpreted these remarks as an endorsement for ALGO, drawing a parallel to the impact of a celebrity like Kim Kardashian endorsing EMAX.
The emergence of these allegations and the subsequent ethical concerns add another dimension to the ongoing legal battle between Binance and the SEC. As the situation unfolds, it remains to be seen how these claims will impact the credibility and integrity of both the SEC chair and the regulatory proceedings against Binance.
