Donald Trump has pardoned Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, who was convicted of violating US anti-money-laundering laws. The pardon, announced by the White House, has ignited a storm of controversy and debate, especially given Zhao's guilty plea in 2023 for failing to maintain an effective anti-money laundering program. He served a four-month prison sentence for it in 2024.
Trump defended his decision, telling reporters at the White House that "a lot of people" had told him Zhao was not guilty and that "what he did is not even a crime". He added that Zhao had been "persecuted by the Biden administration". White House Press Secretary Karoline Leavitt echoed this sentiment, accusing the Biden administration of waging a "war on cryptocurrency" and pursuing Zhao despite "no allegations of fraud or identifiable victims". She stated that Trump pardoned Zhao to "correct this overreach of the Biden administration's mis-justice".
The pardon completely erases Zhao's criminal record, restoring his full rights and opening the door for a possible return to the crypto business. Zhao expressed his gratitude to Trump on X, stating he was "deeply grateful" for the pardon and would "do everything we can to help make America the Capital of Crypto and advance web3 worldwide".
The decision has drawn sharp criticism, with some viewing it as a sign of corruption and undue influence. Senator Elizabeth Warren criticized the move, stating, "CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison. But then he financed President Trump's stablecoin and lobbied for a pardon. Today, he got it,". Mark Hays of Americans for Financial Reform argued that the pardon "sends a strong message that crypto crime is not just encouraged, it is rewarded".
Concerns have been raised about potential conflicts of interest, given Zhao's ties to World Liberty Financial, a crypto venture launched by Trump and his sons. There have also been reports of a deal involving World Liberty Financial, Binance, and an investment fund in the United Arab Emirates. Critics argue that Zhao, a convicted felon, stands to benefit from his pardon while his company supports a Trump-backed venture.
Conversely, supporters of the pardon argue that Zhao has already paid a heavy price and that his innovations have helped shape the modern crypto economy. They view the pardon as a step toward encouraging blockchain innovation in the U.S.. Some market observers believe this action could represent a shift toward a more favorable regulatory environment for digital assets under a potential future Trump administration.
Zhao's pardon could pave the way for Binance to return to the United States, approximately two years after it agreed to suspend its US operations to resolve the Department of Justice's criminal investigation. The company faced accusations of failing to report suspicious transactions with organizations, including Hamas and al Qaeda, and with websites selling child sexual abuse materials. In 2023, Binance agreed to pay $4.3 billion in penalties.
The pardon has sparked debate about the future of cryptocurrency regulation in the United States. Some analysts believe it is a political gesture designed to win support from crypto investors and businesses. Others warn that it could undermine accountability in financial regulation and give special treatment to powerful industry players.
