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Recent developments have emerged following lawsuits by the Securities and Exchange Commission (SEC) against two of the globe\u2019s leading cryptocurrency exchanges<\/a>. <\/p>\n On June 5, the SEC filed a comprehensive lawsuit accusing Binance of mismanagement of customer funds and deception towards regulators and investors about its operations. The next day, the SEC leveled allegations against Coinbase<\/a> for allegedly operating as an unregistered broker of securities, an unregistered exchange, and an unregistered clearing agency. <\/p>\n Now, additional aspects of the Binance lawsuit have emerged, encompassing claims of deceptive practices from Binance and allegations aimed at SEC Chair Gary Gensler.<\/p>\n According to a June 8 Bloomberg <\/em>report<\/a>, Senators Elizabeth Warren (D-Mass.) and Chris Van Hollen (D-Md) penned a letter to U.S. Attorney General Merrick Garland, indicating that Binance may have presented inaccurate information about its business practices. This misinformation, they allege, revolves around the independence of its affiliate, Binance.US, which Binance has claimed to be a distinct entity.<\/p>\n In the letter, they wrote, \u201cBinance and its related entities have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.\u201d<\/p>\n \u201cWhile [Binance CEO Changpeng Zhao] has claimed that\u00a0Binance.US, is a \u2018fully independent entity,\u2019 in reality, he controls the company as a \u2018de facto subsidiary\u2019 of Binance,\u201d the letter continued. <\/p>\n Previously in March, the senators had also led a bipartisan call for Binance<\/a> to provide transparency about potentially \u201cillegal business practices.\u201d <\/p>\n Binance has not responded to these allegations.<\/p>\n In addition to Senators Warren and Van Hollen\u2019s letter, another development in the Binance story is making Web3 headlines. According to a June 7 filing by Zhao and his attorneys, Gensler offered to serve as an informal advisor<\/a> for Binance in 2019. <\/p>\n Gibson Dunn and Latham & Watkins, two law firms representing Binance, allege in the filing that Gensler expressed a willingness to advise the cryptocurrency exchange during multiple discussions with Binance executives and Zhao in March 2019. These documents further claim that Gensler met Zhao for a luncheon in Japan later that month. The two remained in touch, and \u201cZhao understood that the now-Chairman was comfortable serving as an informal advisor,\u201d according to the filing. <\/p>\n Two years later, in 2021, Gensler was appointed the head of the SEC. <\/p>\n WSJ reported in March that Binance approached Gensler about an advisory role <\/p>\n Binance lawyers in a filing today says Gensler approached them in 2019<\/p>\n Really important that we get clarity around this asap.<\/p>\n \u2014 Frank Chaparro (@fintechfrank) June 8, 2023<\/a><\/p><\/blockquote>\n<\/div>\n I am impressed that Gary Gensler took @cz_binance<\/a> rejecting him so personally that he quit crypto and became the SEC chair solely to get his revenge<\/p>\n That\u2019s dedication<\/p>\nU.S. Senators accuse Binance of lying<\/h2>\n
Binance\u2019s legal team alleges former ties to Gensler<\/h2>\n
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