Lawyers for Binance allege that SEC Chair Gary Gensler attempted to secure a job with the exchange.

Before becoming head of the US Securities and Exchange Commission, Gary Gensler offered to serve as an adviser for Binance, according to the crypto exchange, which is now facing scrutiny from the regulator.

In a letter addressed to the SEC’s division of enforcement, Binance’s counsel and the exchange’s CEO, Changpeng Zhao, said that Gensler should have recused himself from the agency’s enforcement actions against Binance.

Binance claims that they conveyed this about four months ago and argued that Gensler could be a “material fact witness.”

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“To date, the Staff has never confirmed whether Mr. Gensler has recused himself, and if he has not, the Commission’s explanation for why not. We remain deeply troubled by this history and the Staff’s refusal to acknowledge it, which compounds our concern about the course of action threatened by the Staff in this matter,” Binance’s lawyers said.

Background

Gensler was nominated by President Joe Biden to serve as SEC Chair and was sworn into office on April 17, 2021.

Since then, Gensler has taken a strong stance that crypto exchanges should register with the agency, and has said that many cryptocurrencies are securities.

On Monday, the SEC sued Binance and Zhao, also known as CZ, over their “blatant disregard of the federal securities laws.”

The regulator alleged that Binance and BAM Trading, doing business as Binance.US, under Zhao’s leadership, were unlawfully operating as an exchange, broker-dealer, and a clearing agency without registering.

The SEC also stated that Solana, Cardano, Polygon, among others, were labeled as securities in the complaint.

Gensler had numerous conversations with Zhao and other Binance staff, discussing the regulatory uncertainty around crypto while offering to serve as an advisor to Binance, according to their lawyers.

“In March 2019, he also met Mr. Zhao for an in-person lunch meeting in Japan, during which they discussed the BNB token, the prospect of BHL establishing a U.S.-based exchange, and other topics,” the lawyers said.

Gensler also sent Zhao his testimony a day before a House Financial Services Committee hearing in 2019, according to the lawyers.