Technology
Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019
SEC Chair Gary Gensler mocks putting a gun to his head in response to a “Blazing Saddles” reference by Rep. Emanuel Cleaver, D-Mo., during the House Financial Services Committee hearing titled “Oversight of the Securities and Exchange Commission,” in Rayburn Building on Tuesday, April 18, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
SEC Chair Gary Gensler, who is in the midst of a hefty crackdown on crypto companies, offered to serve as an advisor to Binance’s parent company in 2019, according to the lawyers for Binance and founder Changpeng Zhao.
Documents filed by the SEC on Wednesday indicate that attorneys from Gibson Dunn and Latham & Watkins, two of Binance’s law firms, allege that Gensler offered to serve as an advisor to the crypto exchange in several March 2019 conversations with Binance executives and Zhao. He eventually met Zhao in Japan for lunch later that month, the filing claims.
At the time, Gensler was teaching at Massachusetts Institute of Technology’s Sloan School of Management. He was appointed head of the SEC in 2021 by President Biden, and over the past year has come down hard on the crypto industry, suing numerous companies for allegedly selling unregistered securities.
Earlier this week, the SEC filed 13 charges against Binance and Zhao, alleging the company failed to register as an exchange and broker-dealer, improperly commingled funds and lacked critical internal controls over its businesses.
Before Gensler started going after Binance, he was trying to cozy up to the company, the lawyers say. The Wall Street Journal previously reported on Gensler and Binance’s relationship, citing internal Binance messages and a person close to the SEC chair. Both suggested that Binance approached Gensler.
In the latest filing, the Gibson and Latham attorneys say that Zhao continued to stay in touch with Gensler after the March meeting. And at the future SEC chair’s request, Zhao sat down for an interview with Gensler as part of a cryptocurrency course he was teaching at MIT.
The SEC on Tuesday described Zhao, who reportedly resides in the UAE, as a “foreign national” with a tendency for “geographic elusiveness.” Zhao’s lawyers now say that the Zhao understood that Gensler was “comfortable serving as an informal advisor.”
Later in 2019, the letter said, Gensler was slated to testify before the House Financial Services Committee, and he sent Zhao a copy of his intended testimony ahead of the hearing.
In July of that year, Gensler testified before the House over Facebook’s proposed and later canceled cryptocurrency Libra and its planned Calibra wallet.
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies,” Gensler’s prepared testimony read.
Gensler’s advice to lawmakers at the time was largely the same as his public statements today. He said that, with Facebook envisioning a wallet to store customer assets, rules needed to be in place “to guard against Calibra’s use or potential abuse of such customer funds.”
He also testified more broadly in language that’s resembles his latest pronouncements.
“We must guard against illicit activities, such as tax evasion, money laundering, terrorist financing and avoiding sanctions,” he said at the time. “We must protect individuals’ privacy.”
Because of Gensler’s ties to Zhao, Binance’s lawyers said they’d asked for his recusal from any actions regarding the company. They say they got no acknowledgement from SEC staff.
An SEC spokesperson said in a statement to CNBC that, “the Chair is very familiar with and full compliance with his ethical obligations including any recusal obligations.”
The SEC’s probes into Binance.US and Binance began in 2020 and 2021, respectively, well after Gensler and Zhao’s last alleged contact.
NIO’s new ES6 already looks to be a key factor as the EV maker looks to expand its brand and compete in the booming Chinese electric vehicle market. According to Morgan Stanley, NIO hit a new year-to-date order intake record aided by the launch of the second-generation ES6.
After launching what many consider its most important model to date two weeks ago with its second-gen ES6 electric SUV, NIO has seen increased interest in the brand.
Although NIO was the only major EV maker in China to see a monthly sales decline in May, delivering 6,155 models (down 8% from April), the company has a plan to turn things around… and it already looks to be paying off.
Although the ES6 has been the company’s top seller since launching in 2018 as a more affordable option to the ES8, NIO knew it was time for an upgrade.
The EV maker is focusing on its NT 2.0 EV platform vehicles, including the recently launched EC7, second-generation ES8, ET5, and ES7 models. All NT 2.0 models are built on the NIO Adam supercomputer using four Nvidia DRIVE Orin system-on-chips (SoCs).
New ES6 boosts NIO’s order intake to record YTD high
A research report released last week from the Chinese consumer behavior research agency CarFans highlighted consumer behavior in NIO stores within the first 72 hours of launching (May 24 to May 27) the new ES6.
The report found each NIO store received 90 pre-orders on average, with around 20 confirmations that included a down payment.
With roughly 330 stores, that’s around 29,700 pre-orders or 6,600 confirmations. For just three days, that’s pretty impressive for a premium SUV.
Although the cancellation rate is expected to be around 10%, the new ES6 is already leading to a new order intake record for the year, according to Morgan Stanley analyst Tim Hsiao (via CnEVPost).
In a research note on June 5, Hsiao said the firm had been tracking feedback from startups’ major sales channels in Tier 1 cities since last year to analyze the market. The team shared data that confirmed the new ES6 accounted for 35% to 40% of new orders in May, suggesting a meaningful impact on inflow as it launched in the final week of the month.
NIO’s overall traffic at flagship stores rose 30% to 40% month-over-month, with momentum continuing into early June. The new ES6 is NIO’s cheapest electric SUV, starting at RMB 368,000 ($51,614).
Meanwhile, the team said that despite customer traffic at the stores it tracks returning to levels seen this February, they are still “20% below last September’s level when the company rolled out ET5.”
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The first turbine blades for Vineyard Wind 1, the US’s first commercial-scale offshore wind farm, have arrived at the New Bedford Marine Commerce Terminal in Massachusetts.
The $3.5 billion offshore wind farm will feature 62 GE Haliade-X 13-megawatt (MW) turbines spaced one nautical mile apart. The first turbine blades – each one 107 meters (351 feet) long – arrived at the Port of New Bedford (pictured above) from GE’s production site in Nazaire, France, on the heavy load vessel Rolldock Sky. (And no, it’s not lost on us, either, that wind turbine blades arrived on a fossil fuel vessel. May we collectively resolve that ironic problem ASAP.)
The turbine sections will be assembled at the terminal before they’re shipped out and installed this summer.
The 800 MW Vineyard Wind 1 is 15 miles south of Martha’s Vineyard and Nantucket and 35 miles from mainland Massachusetts. It’s a 50-50 joint venture between clean energy company Avangrid and Copenhagen Infrastructure Partners (CIP) funds CI II and CI III.
Vineyard Wind I will supply clean energy for over 400,000 homes and businesses in Massachusetts and reduce carbon emissions by over 1.6 million tons per year. It’s expected to come online at the end of 2023.
Read more: This US offshore wind farm is piloting a bubble curtain – what it is and why it’s cool
Photo: Avangrid
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