Changpeng Zhao, multi-billionaire founder of the Binance cryptocurrency exchange, spent four months locked up in federal prison last year. After US President Donald Trump pardoned Zhao in October the government made him a martyr.
Zhao, known as CZ, pleaded guilty in November 2023 due to failure to maintain an effective anti-money laundering program at Binance. In parallel, Binance admitted to violating US sanctions and reached an agreement with financial regulators who accused the company failure to report suspicious transactions involving terrorist groups, child exploitation networks and cybercriminals, as well as other violations. In a particularly incriminating conversation detailed in court documents, one Binance employee told a colleague“We see the bad, but we close 2 eyes.”
As part of the relevant settlement agreements, Zhao agreed resign from his role as CEO of Binance, and Binance agreed leave the US, accept oversight from a US-appointed compliance monitor and pay a record $4.3 billion fine.
Less than two years later, the narrative has changed. October 23 Trump dropped the charges from Zhao's criminal record. The Binance founder is a victim of the Biden administration's “war on cryptocurrency,” a White House spokesman said.
The decision to pardon Zhao will reverberate throughout the U.S. cryptocurrency exchange market, which Binance may seek to return to, legal experts say. This could also have long-term political implications for the crypto industry beyond Trump's presidency.
Whether Zhao's pardon was justified is hotly debated, especially in light of ties between Binance and World Liberty Financial, the crypto business founded by Trump and his sons. (Via Trump Family Legal Entity owns 38 percent of shares at parent company World Liberty Financial.) In May, Binance agreed receive an investment of US$2 billion denominated in US$1.coin issued by World Liberty Financial that could generate tens of millions of dollars from the deal. In July Bloomberg reported that Binance has developed a codebase for USD1.
Notably, Trump claims to know very little about Zhao. “Okay, are you ready? I don't know who he is,” Trump said 60 minutes in an interview aired on November 2: “I can only tell you one thing: my sons are addicted to [crypto]he said later in an interview.
Legal representatives of Zhao and industry allies defended pardon as a legal remedy. “The Czech Republic is the first and only known criminal in U.S. history to be sentenced to prison on this single non-fraud charge,” Teresa Goody Guillen, a partner at the law firm Baker & Hostetler, which is representing Zhao, wrote in a statement. publish on X.
