President Trump announced a pardon for Changpeng Zhao, the billionaire behind the cryptocurrency exchange Binance, on Thursday. This decision effectively nullifies one of the most impactful U.S. government actions against crypto-related illicit activities.
Zhao had previously pleaded guilty to charges of money laundering in 2023, following an extensive investigation by U.S. financial regulators and prosecutors, and served a four-month federal prison sentence.
White House spokeswoman Karoline Leavitt stated that President Trump utilized his constitutional power to pardon Zhao, emphasizing that Zhao’s prosecution was part of the previous Biden administration’s ‘war on cryptocurrency,’ which she declared was now ‘over.’
This pardon exemplifies a pattern where associates of Trump and his family have seen advantages from his efforts to dismantle the extensive crypto regulations implemented under President Joseph R. Biden Jr. To secure the pardon, Zhao employed a team of lawyers and lobbyists connected to the Trump administration. Simultaneously, Binance formed a business alliance with World Liberty Financial, a cryptocurrency venture established by the Trump family.
This collaboration is projected to yield tens of millions of dollars annually for the Trump family and the relatives of Steve Witkoff, who serves as the president’s principal Middle East adviser.
This isn’t an isolated incident; Trump has also extended clemency to other notable crypto figures, such as Ross Ulbricht, the operator of the Bitcoin-driven illicit marketplace Silk Road. Furthermore, since the start of Trump’s term, regulatory bodies have ceased legal actions against major cryptocurrency companies like Coinbase.
Even amidst Trump’s broader initiative to scale back crypto enforcement, the pardon granted to Zhao stands out as particularly remarkable.
Zhao, long recognized as the wealthiest individual in the crypto sector, and a Chinese-born executive residing in the United Arab Emirates, confessed to breaching laws by not implementing robust compliance measures at Binance. This systemic failure enabled individuals in sanctioned nations and members of terrorist organizations such as Hamas, Al Qaeda, and the Islamic State to conduct financial transactions through his platform.
Upon his guilty plea, Zhao, often known as CZ, resigned from his role as Binance’s chief executive but retained his majority ownership and nearly all of his considerable fortune.
With this pardon, there’s a possibility he could once again assume direct leadership of the exchange.
Established in 2017, Binance is globally recognized as the largest and most influential cryptocurrency exchange, frequently handling up to two-thirds of all digital currency trades. Its platform facilitates the buying, selling, and holding of major cryptocurrencies like Binance Coin and Ether, alongside a vast array of less common digital assets.
Zhao holds immense power within the crypto industry. With an estimated net worth of $90 billion, he boasts a massive following of devoted investors who see him as a crypto visionary. His strategic social media posts in 2022 were instrumental in triggering a market panic that ultimately led to the collapse of FTX, a significant competitor to Binance.
However, even as FTX spiraled, Binance itself was under intense scrutiny from U.S. law enforcement agencies.
In November 2023, both Zhao and Binance confessed to violating anti-money laundering regulations. Janet Yellen, then Treasury Secretary, publicly stated that Binance had enabled ‘illicit actors to transact freely,’ supporting a range of heinous crimes from child sexual abuse to illegal narcotics and terrorism.
Zhao’s four-month sentence was considered lenient compared to the punishments received by other crypto industry figures. Even prior to his incarceration, he was already planning his future endeavors, engaging with prominent tech leaders in the U.S. and exploring investments in artificial intelligence.
After his release in September, Zhao quickly became a popular guest on crypto podcasts, frequently praising Mr. Trump. During one interview, he mentioned reading about Marc Rich and Michael Milken, business magnates who also served prison time before receiving pardons.
Leading his clemency efforts, Zhao retained Teresa Goody Guillén, an attorney previously with the Securities and Exchange Commission, who also represents Zach Witkoff, son of Trump’s Middle East adviser. Alongside her was Ches McDowell, a lawyer and lobbyist known to be a long-standing hunting associate of Donald Trump Jr.
Concurrently, Binance established a partnership with World Liberty Financial, the cryptocurrency firm founded by the Trump and Witkoff families. In May, Zach Witkoff publicly announced a $2 billion investment into Binance, specifically in USD1, a cryptocurrency developed by World Liberty.
At a recent Abu Dhabi conference, Zhao was seen interacting and posing for photos with Zach Witkoff and other World Liberty founders. Witkoff later lauded Zhao as a ‘wise man’ on social media.
Not everyone in Trump’s circle supported the pardon. Conservative influencer Laura Loomer, who carries considerable influence with Mr. Trump, publicly expressed on X in October that Zhao should not receive a pardon due to his UAE citizenship.
Loomer questioned, ‘You know who gets Emirati citizenship when they weren’t born in the U.A.E.? People who are trying to evade punishment for crimes.’
Zhao retorted on social media, stating, ‘Many top U.S. entrepreneurs get U.A.E. citizenships. I implore you to visit some time.’