The Trump administration is sending a clear and controversial message to crypto entrepreneurs operating in a murky legal landscape: there’s little to worry about, especially when it comes to the law. This sentiment was reinforced recently when President Trump granted a pardon to Changpeng Zhao, the founder and former CEO of cryptocurrency exchange Binance.
Zhao, widely known as “CZ,” had previously served four months in prison after admitting to charges related to anti-money-laundering violations. Following his release in September 2024, he lobbied the Trump administration for a pardon, asserting that his case had been unfairly prosecuted under the Biden administration. The White House announced its backing of Zhao, claiming his case was overreach by the previous administration.
The implications of this pardon are significant for Binance, which has faced extensive scrutiny and investigations revealing that the platform had enabled illegal activities ranging from child exploitation to drug trafficking and terrorist financing. Zhao’s release could potentially pave the way for Binance’s return to U.S. markets after a lengthy absence stemming from these investigations.
In a notable contrast to Zhao’s pardon, the Biden administration recently secured a high-profile conviction against Sam Bankman-Fried, founder of the FTX exchange, who was found guilty of multiple fraud-related charges. Bankman-Fried was sentenced to 25 years in prison, an outcome hailed as a victory for regulators who have taken a more aggressive stance toward the crypto industry.
Once skeptical of digital assets, Trump has since evolved into a significant player in the crypto space, reportedly amassing over $5 billion in holdings through various crypto ventures, eclipsing even his real estate portfolio. His connections with industry insiders, including Zhao, have proven lucrative. The Trump family’s own crypto platform, World Liberty Financial, is reliant on Binance for its operations, benefiting from the growth of its dollar-pegged token, USD1.
Critics from both sides of the aisle voiced concern over the appropriateness of the pardon, highlighting the close ties between Trump, Zhao, and Binance. Prominent critics, like former Labor Secretary Robert Reich, have characterized the pardon as part of Trump’s “Pay-to-Pardon Scheme,” suggesting a troubling precedent where financial contributions to Trump’s ventures might influence legal outcomes.
Zhao is not alone in benefiting from Trump’s favorable view of the crypto world. Justin Sun, a Chinese crypto billionaire who invested significantly in World Liberty Financial, saw civil fraud charges against him abruptly dropped following his financial contributions. Sun, who had previously evaded U.S. soil for fear of arrest, was also a distinguished guest at a private cryptocurrency dinner hosted by Trump.
Other notable figures pardoned by Trump, like Ross Ulbricht, who was serving life for running the Silk Road marketplace, and Trevor Milton, founder of Nikola, have further drawn scrutiny for their connections to the Trump family and their respective industries.
While the crypto community welcomed Trump’s outreach, the circumstances surrounding these pardons have raised eyebrows. Some investors express unease that these actions might reinforce negative associations between cryptocurrency and fraud.
Despite the mixed reactions, Zhao’s pardon momentarily boosted Binance-linked token values, while broader market reactions were more subdued. Throughout, the White House has denied any suggestions of wrongdoing related to Trump’s pardons, with the former president himself defending his decisions as ones based on perceived justice rather than impropriety. He stated, “He had a lot of support…what he did is not even a crime,” amidst the ongoing discourse about legality and ethics in the rapidly evolving crypto landscape.
