In a surprising twist to the ongoing legal battle between cryptocurrency exchange Binance and the U.S. Securities and Exchange Commission (SEC), lawyers for Binance have revealed that SEC Chair Gary Gensler once offered to be an “informal advisor” to the exchange.
Binance’s legal team argues that this history between Gensler and Binance raises concerns about a potential conflict of interest and calls for Gensler’s recusal from the case.
According to a letter shared by the SEC in a court filing, Binance’s counsel stated that in March 2019, Binance CEO Changpeng “CZ” Zhao and Gensler had a lunch meeting in Japan where they discussed the BNB token and Binance’s plans to open an exchange in the U.S.
The letter further claims that Zhao understood Gensler to be comfortable serving as an informal advisor, an offer reportedly made by Gensler himself.
Binance’s legal team argues that Gensler’s involvement in the case raises questions about his impartiality and potential status as a material fact witness. They call for clarification from the SEC regarding Gensler’s recusal, which has not been confirmed thus far.
This revelation comes as the SEC recently filed a lawsuit against Binance, alleging violations of federal securities laws. The legal battle has intensified, with the SEC also filing for a temporary restraining order to freeze assets on Binance.US. Both parties are scheduled to appear in court on June 13 regarding the order.
In a separate development, a court has ordered the SEC to respond to a petition from Coinbase, another major cryptocurrency exchange, regarding its stance on engaging in rulemaking for the crypto industry. This response is expected to shed light on the SEC’s position and approach to regulating cryptocurrencies.
