Progress: Coinbase refuses to delist tokens and services, Binance retaliates, and Gensler applies to serve as an advisor

Updates: Coinbase keeps tokens and services, Binance fights back, and Gensler applies to advise.

Edit | Wu talks about blockchain

After the SEC filed lawsuits against Coinbase and Binance, both companies responded.

Coinbase’s response was very strong:

Coinbase has no plans to delist the cryptocurrency tokens that the SEC has accused of being securities. “We will continue to operate as usual, and these assets will continue to trade until the court makes a ruling.” It will not stop staking services either.

The tokens that Coinbase is accused by the SEC of being unregistered securities include SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.

Coinbase said that the U.S. Securities and Exchange Commission began changing its “tone” in its inquiries to the company last year. So far, it has not lost any customers or banking partners. “There are over $5 billion on the company’s balance sheet to sustain operations and pay legal fees.”

Binance countered SEC Chairman Gary Gensler.

According to CNBC, documents submitted by the SEC on Wednesday show that lawyers from Binance’s two law firms, Gibson Dunn and Latham & Watkins, claimed that Gensler offered to be an advisor to cryptocurrency exchanges during several conversations with Binance executives and CZ in March 2019. The documents stated that later that month, he had lunch with Zhao in Japan. CZ continued to stay in touch with Gensler after the March meeting. At the request of the future SEC chairman, CZ sat down for an interview with Gensler, which was part of his cryptocurrency course at MIT. Later in 2019, Gensler will testify before the House Financial Services Committee, and he sent CZ a copy of what he planned to testify to before the hearing.

At that time, Gensler was a professor at the Sloan School of Management at MIT. He was appointed chairman of the U.S. Securities and Exchange Commission by President Biden in 2021. The lawyers stated that Gensler tried to please the company before he began investigating Binance.

Because of Gensler’s relationship with CZ, Binance’s lawyers said they asked him to recuse himself from any action related to the company. They said they did not receive confirmation from SEC staff. An SEC spokesperson said in a statement to CNBC that “the chairman is very familiar with and fully complies with his ethical obligations, including any recusal obligations.”

However, the Wall Street Journal reported the opposite in an article on March 5, stating that Binance employees actively invited Gary Gensler to serve as an advisor. Ella Zhang and Harry Zhou, who were in charge of Binance’s venture capital division at the time, met with Gensler in October 2018. Zhou wrote: “I noticed that although Gensler refused the advisory position, he generously shared his licensing strategy.”

Unlike Coinbase, Binance US announced that it will remove hundreds of trading pairs, including 1INCH/USDT, AAVE/USDT, ALICE/USDT, ALPINE/USDT, ANT/USDT, APE/USDT, from trading at Beijing time 0:00 on June 9, and will simplify its buy, sell, and convert products, and reduce the number of supported conversion trading pairs to 226, while suspending its OTC trading services. Binance US said that all cryptocurrencies can still be traded, and only part of the trading pairs of advanced trading are affected.

At the same time, the SEC issued a civil subpoena to Zhao Changpeng, requiring him to serve the plaintiff with a response to the appeal or motion attached to him within 21 days in accordance with Rule 12 of the Federal Civil Procedure. CZ responded that it was only part of the SEC compliance process and that he did not need to appear in person.