A landmark article published in the Wall Street Journal on March 5th 2023, revealed that Binance was actively developing ways to circumvent any impact/lawsuits from US regulators in 2018. Thus, Binance.US was formed (along with some other shell companies and sophisticated insulation policies).
Their moves are understandable, and could be considered self defense, given the still undefined legal standing of crypto in almost all countries around the world.
Bombshell: Gensler tied to Binance
The biggest bombshell from this report, however, is the involvement of Gary Gensler, the current SEC Chair (until 2026). He is among the top three most vocal “haters” of cryptocurrency, along with Warren Buffett and Jamie Dimon.
At the time of his involvement with Binance, Gensler was teaching at MIT. He held the position of CFTC Chair prior to this his teaching appointment.
The Journal obtained documents in which the CFO of Binance (Zhou) stated, “I observe that while Gensler declined advisor-ship, he was generous in sharing license strategies.”
They also note that Gensler likely counseled several other entities/exchanges as well from 2018-2021. Presumably Gensler received some form of compensation for his insights, though this is not specifically addressed in any available online news articles.
Confusion swirling around crypto
Though the crypto industry largely cannot agree whether regulations would be good or bad, everyone agrees that the US government, and specifically the SEC, is acting irrationally. Their decisions appear to be very arbitrary, each day parsing out which stable coins, which exchanges, or which cryptocurrencies will be “tolerated.” Not only is there is no consistency their warnings or lawsuits, but also there is no honest attempt at discussion or resolution.
Venture capitalist with ties to Ethereum questioned Gensler‘s agenda and allegiances after the SEC charged exchange Kraken over failing to register their staking program… and leaving aa huge question-mark over the validity of any and all staking programs (which is still unresolved).
Crypto advocates continue to beseech the SEC, the US government, and the CFTC for some type of regulatory framework to work within. Legislation would be the most clear, but even consistent recommendations from any US governing body would be appreciated.
Perhaps the above revelations shed light on why Mr. Gensler‘s SEC is so ineffective.
Gensler’s involvement with Binance is a clear conflict of interest.
