President Donald Trump pardoned Binance founder Changpeng Zhao on Thursday, triggering backlash from Democrats who accuse the administration of rewarding criminal behavior amid a government shutdown, in exchange for billions allegedly funneled into Trump's personal crypto ventures.
"Trump's pardon of Binance founder Changpeng Zhao—who pleaded guilty to enabling money laundering and facilitating suspicious transactions with child abusers, drug dealers, and terrorists—is an appalling but unsurprising reflection of his presidency: one defined by corruption, self-interest, and loyalty to criminals over working-class American families," Ranking Member Maxine Waters said in a Wednesday statement.
On Myriad, the prediction markets platform developed by Decrypt's parent company DASTAN, users predict that this will be the longest government shutdown in U.S. history.
Zhao, known as "CZ," pleaded guilty in 2023 to violating U.S. money laundering laws and served four months in federal prison after resigning as CEO of the world's largest crypto exchange.
The White House confirmed the pardon Thursday, with Press Secretary Karoline Levitt defending the move as ending "the Biden Administration's war on crypto."
"CZ has spent months lobbying Trump and his family while funneling billions into Trump's personal crypto company, World Liberty Financial,” Waters said. The pardon was the payoff and a blatant example of the kind of pay-to-play corruption that Trump and his Administration continue to engage in."
The pardon comes amid scrutiny of Trump’s close ties to the crypto industry and whether his administration’s lenient stance shows policy priorities or personal interests.
Trump's family has reportedly made $1 billion in profits from crypto businesses, and Zhao's Binance has invested billions in Trump's World Liberty Financial project.
Fake news
When reporters asked about the pardon and whether it had anything to do with Zhao's involvement in his family's crypto business, Trump said, "Well, you don't know much about crypto.
“You know nothing about nothing, you're fake news." Trump noted, saying he pardoned Zhao "at the request of a lot of very good people" who told him "what he did is not even a crime."
"If Congress does not stop this kind of corruption in pending market structure legislation, it owns this lawlessness,” Senator Elizabeth Warren tweeted following the pardon.
"A US Senator can't get her facts right, in a public post about a person's charge,” Zhao tweeted, responding to Warren's criticism. “There were NO money laundering charges.”
YouTube crypto investigator Coffeezilla pointed out the financial connections in a recent tweet, noting 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.
Peter Chung, head of research at Presto Research, told Decrypt 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.”
Speculation is also mounting over a possible pardon for FTX founder Sam Bankman-Fried, serving 25 years for fraud, after conservative activist Laura Loomer alleged a “massive and well-funded” campaign is underway on his behalf.
Though that's unlikely to happen given the fallout of the previous bull run, compounded by the scale of his crimes, his 25-year sentence, and the deep resentment he still faces within the crypto community.
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