Binance crypto exchange had approached Gary Gensler, the current chairman of the United States Securities and Exchange Commission (SEC), to be an adviser before he assumed his current position, according to a report by The Wall Street Journal.
The report, which cited messages and documents from 2018 and 2020, as well as interviews with former employees, revealed that Gensler was approached by the firm in 2018 and 2019 while he was teaching at the Massachusetts Institute of Technology.
The messages from Binance executives showed that Ella Zhang, then head of Binance’s venture investing arm, and Harry Zhou, co-founder of Binance-invested firm Koi Trading, met with Gensler in October 2018.
However, Gensler declined the advisor position, but Zhou noted that Gensler was generous in sharing license strategies. A second meeting between Gensler and Binance founder Changpeng “CZ” Zhao took place in Tokyo in March 2019.
The report also highlighted Binance’s relationship with its American arm, Binance.US. In a presentation titled “Insulate Binance from US Enforcement,” employees suggested that Binance should have a “purely contractual” relationship with the American unit to shield Binance from regulatory oversight.
However, Binance has since noted that the companies are separate legal entities and that it does not have any U.S. customers.
Binance is reportedly facing fines and penalties as it works to settle outstanding regulatory and law-enforcement investigations in the United States.
The company has been increasing its compliance and investigations headcount, which reportedly increased by 500% last year.
Despite the missteps during its expansion, Binance has made significant investments in compliance talent, processes, and technology, making it a different company today when it comes to compliance, according to a statement by the exchange.