The pardon has been widely anticipated by friends, associates and the cryptocurrency industry at large
[WASHINGTON] Binance co-founder Zhao Changpeng has received a pardon from US President Donald Trump, one of the biggest moves yet by the president to fully embrace the crypto industry and give legal reprieves to some of its most prominent people.
The move marks the latest act of clemency the White House has granted to a crypto entrepreneur, underscoring how the Trump administration has positioned itself as a friend of the industry and how the president’s family has enriched itself from it. Binance assisted one of its family ventures with the launch of its stablecoin, which could yield tens of millions of US dollars a year.
Trump told reporters that Zhao was “persecuted” by the Biden administration. He added that he didn’t believe he had ever met him. “A lot of people say that he wasn’t guilty of anything,” Trump said. “I gave him a pardon at the request of a lot of very good people.”
Trump has used his power to unwind several prosecutions that were hallmarks of the former administration’s crypto enforcement agenda.
He pardoned Silk Road founder Ross Ulbricht, who was serving life in prison for allowing criminal activity to flourish on the dark web marketplace. The president also pardoned the founders of crypto exchange BitMEX.
Zhao, known as CZ, created what would become the world’s largest cryptocurrency exchange when he launched Binance in 2017. He ultimately got in trouble for failing to implement adequate anti-money laundering measures there, and pleaded guilty to violations in a deal with the US government that put him in jail for four months and included a US$4.3 billion settlement with Binance.
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The pardon has been widely anticipated by friends, associates and the cryptocurrency industry at large. A token associated with Binance, BNB, hit a record last month on speculation that it was imminent. It jumped again on Thursday (Oct 23) after Trump offered formal forgiveness for Zhao’s offences.
“Deeply grateful for today’s pardon and to President Trump for upholding America’s commitment to fairness, innovation, and justice,” Zhao posted on X. “Will do everything we can to help make America the Capital of Crypto.”
Asked to respond to accusations that the pardon amounted to a corrupt bargain, White House spokesperson Karoline Leavitt said the decision was “thoroughly reviewed” by White House lawyers.
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The lack of safeguards under Zhao’s leadership at Binance allowed for a wide range of misbehaviour, US authorities said when they charged him in 2023.
The exchange facilitated transactions for the military wing of Hamas, hackers and money launderers, and let some customers trade with residents of Iran in contravention of US sanctions, they said. Between 2018 and 2022, Binance processed at least 1.1 million transactions that violated US sanctions, worth about US$898 million, according to the government’s case.
Trump family ties
Binance and Zhao have been key backers of World Liberty Financial, one of the Trump family’s crypto ventures. Binance wrote the code underpinning the project’s USD1 stablecoin, Bloomberg reported in July. That helped make USD1 usable in a US$2 billion transaction that saw an investment firm founded by the United Arab Emirates buy a stake in Binance.
Zhao did his stint at a minimum-security prison known as Lompoc in California’s Santa Barbara County. After his release, he met with Steve Witkoff, co-founder of World Liberty and the president’s Middle East envoy, Bloomberg reported.
Recently, Zhao has been travelling the world promoting the adoption of cryptocurrency in places ranging from Dubai to Pakistan. Another Zhao project is the Giggle Academy, which aims to teach young children about finance and crypto, rewarding them for performance through “soul-bound tokens”.
Under the 2023 plea deal, Zhao was forced to step down as Binance CEO though he recently caused a stir on social media by changing his title from being an ex-Binance person to a current one. His life and business partner, Yi He, is still deeply involved in Binance’s operations as chief marketing officer.
Zhao was nonetheless able to hold on to his controlling stake in the company, which soared in value immediately after Trump’s presidential victory. He now has a net worth of US$54.5 billion, according to the Bloomberg Billionaires Index.
In early April, the Justice Department disbanded its National Cryptocurrency Enforcement Team and vowed to close existing cryptocurrency investigations that do not align with the administration’s priorities.
The moves reflect the administration’s focus on toning down crypto enforcement, particularly regarding exchanges, mixing services and wallet providers. BLOOMBERG
