Trump Grants Pardon to Cryptocurrency Exchange Founder
In a significant move, former President Donald Trump granted a pardon to Changpeng Zhao, the founder of Binance, the largest cryptocurrency exchange globally. The White House released a statement asserting, “President Trump exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency. The war on crypto is over.” This development marks a pivotal moment in Zhao’s legal battles, as he had previously admitted guilt in late 2023 to a single charge related to inadequate anti-money laundering measures, resulting in his resignation as CEO of Binance and a prison sentence of four months. In connection with these allegations, Binance also settled for a staggering $4.3 billion.
Zhao’s Influence and Legal Challenges
Often referred to by his initials, CZ, Changpeng Zhao is recognized as one of the wealthiest figures in the cryptocurrency sector. He transformed Binance into the leading platform for cryptocurrency trading, though the exchange has faced operational restrictions in the United States following his guilty plea. Trump’s pardon represents a substantial triumph for Zhao and Binance amid a backdrop of ongoing discussions and lobbying efforts. This action also indicates a broader trend within the Trump administration towards reducing regulatory pressures on the cryptocurrency market, coinciding with the family’s ambitions to establish a significant presence in the crypto space.
Trump Family’s Involvement in the Crypto Sector
Reports have surfaced indicating that representatives from Trump’s family-run cryptocurrency venture engaged in negotiations with Binance regarding a potential investment in the exchange’s U.S. operations. However, Zhao has publicly denied any claims of pursuing a deal as a condition for his pardon. In a March post on X, he remarked, “Fact: I have had no discussions of a Binance US deal with … well, anyone,” adding that “no felon would mind a pardon.” Despite this, Binance has played a crucial role in bolstering the Trump family’s World Liberty Financial crypto business. Earlier this year, Binance facilitated a $2 billion transaction from an Emirati investment fund, which was notably settled in a cryptocurrency associated with World Liberty Financial, enhancing the legitimacy and profitability of Trump’s digital currency initiatives.
Concerns Raised by Democratic Senators
In the wake of the $2 billion transaction, several Democratic senators, including Elizabeth Warren, who serves as the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, expressed alarm over the perceived collusion between Binance and the Trump administration. They issued a statement suggesting that the two entities appeared to be negotiating a deal that could financially benefit the president. The senators stated, “As the Administration loosens oversight on an industry where bad actors have violated money laundering and sanctions law, it is not surprising that Binance, which has admitted to prioritizing its own growth and profits over compliance with U.S. law, would seek to roll back the oversight required by its settlement.”
Legal Issues Surrounding Binance
The U.S. Department of Justice has accused Binance of neglecting to report more than 100,000 suspicious transactions, some of which are linked to organizations classified as terrorist entities, including al-Qaida and Hamas. Although the Securities and Exchange Commission filed a lawsuit against Binance in 2023, the case was subsequently withdrawn shortly after Trump’s inauguration. As of now, Binance has not provided a response to requests for comments regarding these developments.
