Donald Trump has pardoned Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, who was convicted of violating federal anti-money-laundering laws. Zhao, a Chinese-born Canadian, pleaded guilty in November 2023 to enabling money laundering while serving as Binance's CEO. This plea was part of a multi-billion-dollar settlement between Binance and the Justice Department, which led to Zhao stepping down as CEO. He served four months in prison after his April 2024 sentencing, and his company was barred from operating in the U.S.
The pardon, issued on Thursday, has ignited a storm of controversy and speculation, particularly regarding potential business interests influencing the decision.
Justification for the Pardon
The White House, through Press Secretary Karoline Leavitt, stated that Trump was exercising his constitutional authority, claiming Zhao was a victim of political prosecution by the Biden administration in their "war on cryptocurrency". Leavitt argued that the Biden administration pursued Zhao despite the absence of fraud allegations or identifiable victims, and that the sentence sought was excessively harsh. Trump himself echoed these sentiments, downplaying Zhao's crimes and stating he was acting on the request of "very good people".
Conflict of Interest Allegations
Critics have pointed to potential conflicts of interest, given the Trump family's increasing involvement in the cryptocurrency industry. Trump's sons, Eric and Donald Jr., founded World Liberty Financial last year. An investment fund in the United Arab Emirates chose World Financial Liberty's stablecoin, USD1, to back its purchase of a stake in Binance.
Senator Elizabeth Warren, a vocal critic of the crypto space, criticized the pardon, highlighting Zhao's guilty plea, his support for Trump's crypto ventures, and Trump's subsequent pardon as a concerning sequence of events.
Binance's Response and Future Prospects
Binance has been barred from operating in the U.S. following Zhao's guilty plea in 2023. The Wall Street Journal suggests the pardon could pave the way for Binance to resume operations in the U.S. A Binance spokesperson expressed gratitude to President Trump for his leadership and commitment to making the U.S. the crypto capital of the world. Zhao himself stated he was "deeply grateful" for the pardon and would "do everything we can to help make America the Capital of Crypto".
Ethical Concerns and Future Implications
Trump's willingness to issue pardons has created a cottage industry of attorneys lobbying the White House and Justice Department on behalf of convicted clients, raising concerns about fairness in the process. Some ethics experts have criticized the clemency, considering the president's business empire includes crypto ventures. The pardon has sparked debate about the ethical and legal precedents it sets for future administrations.
