Trump Pardons Binance Founder CZ, Sparks Corruption Claims

The White House confirmed on Thursday that President Trump granted a full pardon to Binance founder Changpeng “CZ” Zhao, who had pleaded guilty in 2023 to violating U.S. money laundering laws and served four months in federal prison. The move triggered immediate condemnation from top Democrats, with Ranking Member Maxine Waters calling it “an appalling but unsurprising reflection of his presidency: one defined by corruption, self-interest, and loyalty to criminals over working-class American families.” Waters specifically alleged that “CZ has spent months lobbying Trump and his family while funneling billions into Trump’s personal crypto company, World Liberty Financial,” describing the pardon as “the payoff and a blatant example of the kind of pay-to-play corruption that Trump and his Administration continue to engage in.”

Senator Elizabeth Warren joined the criticism, tweeting that “If Congress does not stop this kind of corruption in pending market structure legislation, it owns this lawlessness.” The political firestorm comes amid what prediction markets platform Myriad users predict will be the longest government shutdown in U.S. history, adding another layer of controversy to the administration’s actions. White House Press Secretary Karoline Levitt defended the pardon as ending “the Biden Administration’s war on crypto,” though the timing and circumstances have raised serious questions about the administration’s priorities.

The pardon comes amid intense scrutiny of Trump’s financial ties to the cryptocurrency industry, with reports indicating Trump’s family has made $1 billion in profits from crypto businesses. According to Democratic critics and financial investigators, Zhao’s Binance has invested billions in Trump’s World Liberty Financial project, creating what appears to be a direct financial relationship between the pardon recipient and the president’s personal business interests. YouTube crypto investigator Coffeezilla highlighted these connections in a recent tweet, noting that a $2 billion investment into Binance by MGX was allegedly paid in Trump’s USD1 stablecoin, generating an estimated $60-80 million annually for World Liberty Financial through treasury yields.

When questioned by reporters about whether the pardon was connected to Zhao’s involvement in his family’s crypto business, Trump responded defensively, saying “Well, you don’t know much about crypto. You know nothing about nothing, you’re fake news.” The president noted that he pardoned Zhao “at the request of a lot of very good people” who told him “what he did is not even a crime.” However, Zhao’s own legal situation contradicts this characterization—he pleaded guilty to enabling money laundering and facilitating suspicious transactions that investigators said involved “child abusers, drug dealers, and terrorists,” though Zhao later disputed some details of the charges in his response to Senator Warren.

Peter Chung, head of research at Presto Research, told Decrypt that the pardon “clears the path for a potential CEO return, and such a move could turbocharge Binance’s U.S. expansion, drawing institutional capital and advancing Trump’s pledge to make America the ‘Capital of Crypto.'” This analysis suggests significant market implications, as Binance remains the world’s largest crypto exchange and its expanded U.S. presence could reshape the competitive landscape for major cryptocurrencies including BTC, ETH, and the exchange’s native token BNB.

The pardon also raises questions about potential future clemency actions in the crypto space. Speculation is mounting over a possible pardon for FTX founder Sam Bankman-Fried, who is serving 25 years for fraud, after conservative activist Laura Loomer alleged a “massive and well-funded” campaign is underway on his behalf. However, analysts consider this unlikely given the scale of Bankman-Fried’s crimes, his 25-year sentence, and the deep resentment he still faces within the crypto community. The contrasting treatment of these two major crypto figures—Zhao receiving a pardon after four months while Bankman-Fried serves a lengthy sentence—highlights the uncertain regulatory and political environment facing the industry.

The ongoing government shutdown compounds the uncertainty, creating a complex backdrop for cryptocurrency regulation and enforcement. As the administration pushes forward with its pro-crypto agenda, the Zhao pardon represents both a significant policy shift and a potential precedent that could influence how other crypto industry figures navigate the U.S. regulatory landscape. The move signals a dramatic departure from the previous administration’s approach to cryptocurrency enforcement and sets the stage for potentially transformative changes in how digital assets are regulated and integrated into the traditional financial system.