Binance is defending itself against the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) with a juicy detail: SEC chief Gary Gensler had offered himself as an advisor to the crypto exchange in 2019. Meanwhile, Coinbase is also responding to accusations.
At the beginning of the week, the U.S. Securities and Exchange Commission (SEC) published complaints against crypto exchanges Binance and Coinbase. Now the defendants are beginning to build their defenses. In the process, Binance reveals a juicy detail about SEC chief Gary Gensler and calls for him to be personally excluded from the proceedings. As reported by US broadcaster CNBC, Gensler had offered to act as a consultant to Binance in 2019. In this context, there had also been several meetings between Gensler and Binance representatives, up to CEO Changpeng Zhao. CNCB bases its report on Binance’s legal representatives. According to the report, the latter now want Gensler to be excluded from the proceedings.
Genser was a lecturer at the University of Massachusetts in 2019, teaching on blockchains and cryptocurrencies. It was not until 2021 that he took over as head of the SEC at the suggestion of U.S. President John Biden. Contact between Gensler and Binance CEO Changpeng Zhao reportedly continued informally in 2019, but did not lead to any official engagement. According to CNBC, a spokesperson for the SEC dismissed suspicions of conflicts of interest and said Gensler was aware of ethical obligations as well as bias rules. However, the U.S. press has also unearthed an appearance by Gensler before the House Finance Committee in which he asserted that he does not own cryptocurrencies or advise crypto companies. An aftertaste remains, according to the tenor.
Coinbase and Binance to continue US business as usual for now
Meanwhile, Coinbase has also had its say in its own matter. Chief legal counsel Paul Grewel said on The Scope podcast that they have not yet made a decision on whether to delist cryptocurrencies due to the SEC lawsuit. The SEC accuses Coinbase, among other things, of offering some cryptocurrencies for trading, although these should be classified as securities and are therefore subject to admission. The list includes Cardano (ADA), Solana (SOL) and Polygon (MATIC), 3 of the 10 most capitalized cryptocurrencies worldwide.
Binance, in turn, had initially announced after the lawsuit that it would delist around 100 trading pairs in the US. In the case of Binance, the SEC specifically objected to the listing of 12 cryptocurrencies. Now, however, Binance has reconsidered its position and announced in an update that it will only take 10 trading pairs off the market, and only 2 of them against the US dollar. This had been decided after thorough considerations and due to customer requests. The list of cryptocurrencies attacked by the SEC in various lawsuits has now grown to at least 55.
Conclusion: crypto industry moves together to fend off SEC attack
Coinbase in particular had in the past – albeit grudgingly – regularly relented when the SEC had something to object to, withdrawing an interest offer on deposits in stablecoins, for example. This cozying up to the SEC is apparently over, and Coinbase seems to be bracing itself for a long court battle. Binance had announced “resolute resistance” immediately after the lawsuit against itself and is now even showing offensive power with details unpleasant for Gensler. The two heavyweights among the crypto exchanges are also demonstrating that they do not want to take on the dispute with the SEC on the backs of customers and have so far largely refrained from voluntary listings of popular cryptocurrencies, which the SEC wants to ban de facto. Meanwhile, the overall crypto market is showing signs of consolidation and the initial shock after the SEC broadside seems to be fading because the market participants under attack are not buckling.