Richard Painter, a University of Minnesota law professor who served in the White House as George W. Bush's chief ethics lawyer, told me there is no parallel in American history to what we are seeing. “Corruption scandals typically involve campaign money going to politicians of both parties,” Painter said. “This is the first time when we are talking about the personal business and personal money of the president.”
Some of the details leading up to last week's pardon are unclear. But from several media reports, we know quite a bit about the relationship between Binance and World Liberty Financial (WLF), a crypto business majority owned by the Trump family. Zhao was released from prison last September. According to Bloomberg articleTwo sources said that shortly after Trump's re-election, Zhao met at a bitcoin conference in Abu Dhabi with businessman Steve Witkoff, Trump's WLF partner who later became the US special envoy to the Middle East. (Bloomberg also quoted a source close to Vitkov, who said that Vitkov does not remember this meeting.) In March Wall Street Journal reported that Zhao was seeking a presidential pardon and that representatives of the Trump family were in negotiations to acquire a stake in the US division of Binance. (At the time, Zhao denied asking for a pardon, and the deal fell through.) That same month, WLF announced it was entering the fast-growing stablecoin market and creating its own coin, USD1.
Stablecoins are digital money that are less volatile than cryptocurrencies such as Bitcoin. Unlike other digital assets, the value of stablecoins must be backed one-to-one by reserves of reliable assets such as US Treasuries. WLF's decision to launch USD1 came shortly before Congress began considering legislation to create a regulatory framework for stablecoins. That GENIUS Actwhich Trump eventually signed into law this past summer. With USD1, WLF aimed to compete with established stablecoins including Tether, which was launched in 2014 by the crypto company of the same name, and USDC, which fintech company Circle released in 2018.
As with any new crypto product, WLF's challenge was to achieve widespread adoption of the US dollar. The big breakthrough came in May when Binance agreed to accept a $2 billion investment from MGX, a fund controlled by the UAE government, which was paid for using Trump's stablecoin. MGX Representative said Forbes that Binance requested that the transaction be settled in cryptocurrency and the parties settled on US$1 as it is “backed by a 1:1 conservative mix of US$ denominated assets…all held and managed by an independent US custodian in externally audited custodial accounts.” For WLF and its new digital dollar, this transaction was transformative. “The deal resulted in the volume of cryptocurrency in circulation increasing 15-fold and overnight becoming one of the largest in the world,” said Magazine marked. Additionally, MGX's purchase of $1 USD to close the trade triggered an influx of capital into WLF, which while Binance held the currency, the Trump Company could invest in Treasuries and other safe-haven securities to generate returns that Bloomberg estimated at approximately eighty million dollars per year.
In-depth investigation By TimeIn September, he noted that two weeks after MGX bought Binance, the White House agreed to allow the UAE to import hundreds of thousands of advanced computer chips that are used to train artificial intelligence models and are subject to US export restrictions. Binance's investment has raised questions about the motivations of the UAE, an oil-rich Gulf kingdom, as well as the Trump administration's security policies. But the most immediate beneficiary of the deal was the WLF. “We thank MGX and Binance for their trust in us,” World Liberty CEO Zach Witkoff, Steve’s son, said at a conference in Dubai.
Binance's collaboration with WLF reportedly went beyond accepting $1 as a means of payment and storing it. Bloombergciting three unidentified sources reported that “Binance has written the underlying code to power USD1.” (A World Liberty spokesperson told the publication that its report was “factually incomplete.” A Binance spokesperson said the company followed a “standard listing process.”) Magazine reported about the partnership between WLF and crypto trading platform PancakeSwap, the purpose of which was to stimulate the adoption of USD1. PancakeSwap was created in 2020 by anonymous developers who, according to Magazineworked at Binance. The article also quotes Trevor Xu, a crypto entrepreneur from Melbourne, Australia, who said: “The core idea in the ecosystem is that Binance supports the US dollar1.”
