Source: The Pomp Podcast

Translation: Azuma (@azuma_eth), Odaily Planet Daily (@OdailyChina)

Editor’s Note: On October 22, U.S. President Trump officially signed a pardon for CZ — see Trump Pardons Binance Founder CZ: 13 Months, From Imprisonment to Complete Freedom for details, but there remains much information about the pardon itself that the public does not fully understand.

On November 15, CZ's personal lawyer, Teresa Goody Guillén, a partner at the well-known law firm Baker Hostetler, was interviewed by Morgan Creek founder Anthony Pompliano. In her conversation with Pompliano, Teresa mentioned many details about the accusations and the reasons and processes behind the pardon that had not been fully disclosed before. CZ himself has also shared and liked Teresa's interview content.

Below is a transcript of Teresa's interview, translated by Odaily Planet Daily.

Opening

• Pompliano: Hello everyone, today we are going to have a very important and serious conversation. I have invited CZ's personal lawyer, Teresa Goody Guillén, who was deeply involved in the process of CZ obtaining the pardon. I have seen a lot of controversy online about how CZ was pardoned, whether it involved "quid pro quo," or even potential corruption. So I reached out to Teresa to discuss these concerns face-to-face, whether they are simple details or sharp questions.

What is the reason for the pardon?

• Pompliano: First, please tell us what CZ was accused of? What was the reason for his pardon?

Teresa: CZ was accused of Binance failing to implement and maintain anti-money laundering programs and compliance systems. It is important to clarify that this is a regulatory violation, a compliance issue, but there was no money laundering involved; it was just that Binance did not implement the anti-money laundering plan. Therefore, he was pardoned because he should not have been prosecuted.

Trump also stated in the pardon announcement that he does not believe CZ committed any crime and should not have been prosecuted. So, he was pardoned in the name of justice.

CZ is the only person prosecuted and even imprisoned for this specific accusation or similar nature (characterized by no fraud, no victims, no criminal record, etc.). The unfair treatment he received is vastly different from that of anyone else in history.

• Pompliano: Why was he treated unfairly?

Teresa: I believe this is part of the "cryptocurrency war" initiated by regulators. At that time, following the collapse of FTX, they needed to take action against someone, they had to prosecute someone and persecute someone, and unfortunately, CZ became that person.

• Pompliano: If I understand correctly, it was because the company did or did not do certain things that the regulators targeted them. Is it common for executives to bear personal responsibility for this? On one hand, I can understand someone saying that the CEO should be responsible for the company's actions; but on the other hand (I did a rough Google search), large banks or other financial institutions have also been accused of similar things, but the executives themselves were not implicated. What is the usual handling and distinction between companies and executives?

Teresa: Absolutely correct, executives are never prosecuted for these kinds of things. You can name any large financial institution; it has likely been accused of the same or worse violations, but we have never seen any CEO prosecuted. This has never happened, nor have any other executives been prosecuted for these specific crimes; this is not how the judicial system typically operates.

Unveiling the Pardon Process

• Pompliano: We now know that CZ did indeed receive a pardon, but I still have many questions. I see many people speculating about the inside story of the pardon… So how was the pardon actually achieved? Was there some kind of "quid pro quo"? Was there corruption involved? I hope you can first introduce us to the process of obtaining a pardon, and then we can discuss the various speculations in the community.

Teresa: Sure. To obtain a pardon, you must first fill out an application and state the reasons for the application, after which a series of people will review these materials and provide opinions. The Department of Justice, pardon lawyers, the pardon office, and the White House Counsel's Office will all be involved.

So before the pardon, there needs to be a lot of legal review, and these reviews must be conducted on the submitted application. Therefore, this is a relatively standardized process.

• Pompliano: When you submit the application, who receives the application? Is there a dedicated pardon office? Is there a specific person in charge? Does the application go directly to the president? The president surely cannot personally sift through hundreds or thousands of applications, so who handles it in this process?

Teresa: There are many ways to process pardon applications, and the specific method depends on how the pardon application is transmitted, such as whether it is through a dedicated pardon lawyer, through the Department of Justice's website, or through other channels, ultimately reviewed by reviewers.

I know that different people submit pardon applications in various ways, but the president does not personally receive these applications, at least not in my knowledge.

• Pompliano: So after the application is submitted, someone reviews it and provides recommendations to the president on whether this pardon should be considered. Is this a unilateral decision by the president? Or is there a process where certain people (like staff, administrative personnel, the Department of Justice, etc.) make recommendations?

Teresa: I am not sure about the specific internal operations of the White House, but there are definitely some people who need to sign off on it; the White House Counsel's Office needs to sign off, and the pardon lawyer also needs to sign off. Of course, the final decision rests with the president, and he must sign it personally.

So, this is a collaborative effort by different people, but I was not involved in these specific discussions, so I cannot provide more details.

Does the Pardon Involve "Quid Pro Quo"?

• Pompliano: There are many speculations surrounding CZ, Binance, World Liberty Financial (WLFI), and Trump. I probably don’t need to repeat all the speculation; you’ve certainly seen it all… So how would you rebut the speculation about "quid pro quo (paying for a pardon)"? How should people understand the relationship between business transactions and the pardon process?

Teresa: Well… this is actually just a pile of many misstatements. When you see those suspicions, have you seen any verified information? You might see some media reports citing another media report, which then cites another media report, but these contents have no real basis, only some so-called "sources close to someone," which usually point to an unreliable source.

For example, the media always refers to World Liberty as Trump's company, but I have never seen any basis for that. I saw Trump's "honorary member" status on their website, and I saw reports mentioning that certain Trump entities hold minority stakes in the company, but I have not seen any evidence to prove that this is Trump's company.

Some people always take rumors as facts and then use that as a premise to make assumptions, but the truth is often not so. The so-called "quid pro quo" speculation is made on this basis, but these claims are completely unreasonable. For instance, WLFI's stablecoin USD1 is issued on BSC, which is an open and permissionless action, just like if I list a product on an e-commerce platform, it does not mean I have any special relationship with the platform owner. That is the situation; the assumption is completely meaningless, but some people make judgments based on these assumptions, which is clearly a fundamental misunderstanding of business operations or blockchain operations.

Also, regarding the accusations against Binance, some say MGX invested in Binance using USD1, which proves the relationship between Binance and WLFI, and indicates that Binance and CZ are "bribing" the president, which is also a fundamental misunderstanding of how stablecoins operate and the business model. It’s like if I buy wheat from you and you pay in Swiss francs, I become an investor in Swiss francs, indicating that I am "bribing" Swiss politicians. This makes no sense; it is exactly the same as the current accusations.

So, these speculations are fundamentally misunderstandings. Many people who understand how ridiculous these accusations are do not pay much attention to these matters, but those who do not understand the basic operating model keep repeating these claims, and as a result, they spread further. This is what we are seeing now.

• Pompliano: I know you are a very good lawyer. I have always wanted to be a lawyer; although I am not smart enough, I think I can "test" you a little. Is USD1 only issued on BSC, or is it also issued on other chains?

Teresa: You are very clever. Yes, USD1 does exist on other chains as well. This is another key point; other exchanges also hold USD1, but no one would use that to say that other exchanges are also sending money to the president; only Binance is facing these rumors.

• Pompliano: Have the CEOs of other cryptocurrency exchanges received pardons from the Trump administration?

Teresa: I believe Arthur Hayes also received a pardon; he is the CEO of BitMEX. By the way, the pardon mechanism has existed since the founding of the United States, including during the British period, and includes individuals and entities for both civil and criminal offenses. So, pardons have actually existed for a long time; they have just recently focused more on criminal offenses and personal issues. Oh, and there’s also Ross Ulbricht from Silk Road, who also received a pardon.

• Pompliano: Let me return to the critics' perspective; some people might think "where there’s smoke, there’s fire." So is there some kind of payment method, like Trump having a secret Bitcoin wallet, and CZ or Binance directly sent him money? Is there a possibility of that, or is it just a conspiracy theory?

Teresa: I know CZ, so I know that this would never happen. He is not that kind of person. I have some understanding of the president; I do not know him, of course, I would love to meet him, but I do not think this is something he would do. I also do not know if he has a Bitcoin wallet; if he does, it would surprise me.

If such a thing existed, we would have seen related reports long ago, and it would be a very verifiable and credible way. This is also one of the wonderful aspects of distributed ledger technology — transparency. Since there isn’t, it means that such a thing did not happen.

CZ's Personal Handling

• Pompliano: I have known CZ for many years. I have always thought of him as a very calm, composed, and organized person. Earlier this year, I interviewed him, and he talked about coming from a village without electricity or running water, yet ultimately becoming one of the richest people in the world. I can't imagine how difficult it must have been to go through all that; how does he handle it all? This is actually a very important part of the whole situation that is often overlooked. Beyond the legal, political, factual, and rumor aspects, CZ is also a person; he has a family and emotional issues. How does he face all of this?

Teresa: This is another very impressive aspect of CZ. As his lawyer, my emotional ups and downs are greater than his because he is so calm and composed, handling everything with poise. I consider myself an optimist, but his level of optimism is extraordinary; he always sees the good side of things, which I greatly admire. I don't know anyone who can handle things as calmly and composedly as he does, and he is always grateful for everything he has.

I’m glad you brought up the personal side of CZ because sometimes when I see certain people attacking him through various means, like reading completely false reports, it really makes me angry. I think it’s very important to value everyone’s humanity. When you attack or defame someone, or try to prevent someone from receiving a pardon, remember that they are also a person with a family; you shouldn’t treat them that way.

The Two-Tiered Fluctuation of Regulatory Attitudes from Politicians

• Pompliano: I remember Elizabeth Warren (note: Democratic Senator) made a lot of criticisms regarding CZ. I recall that you (or CZ himself) responded to her that her statements were "inaccurate," but then she responded again, and it became increasingly intense, almost like a "soap opera"… Can you tell us about that scene? Is it normal for politicians to intervene and respond to such matters? What exactly happened?

Teresa: First, Warren spoke on social media saying that CZ was convicted, but in reality, CZ was not convicted. Then Warren accused CZ of doing improper things in the process of obtaining or requesting a pardon, further placing criminal responsibility on him. These statements are also inaccurate.

No matter who you are, you cannot casually say someone has committed a crime or accuse them of multiple crimes without any basis. Of course, government officials may enjoy some immunity in certain cases, but this immunity should be limited. I hope we can focus more on this because the immunity these individuals enjoy is not what our founding fathers intended. This is a significant issue, especially when politicians can profoundly influence people's lives and livelihoods through their words; the limitations on immunity become particularly important.

• Pompliano: It feels like this is actually a political issue. Regarding cryptocurrency regulation, we have seen various crackdowns over the past few years, but the new government now takes a completely different stance. This political nature is like a pendulum; do you think we will continue to see this back-and-forth swinging? Should people in the industry expect this volatility, or do you think that once there is a favorable policy, it will become very difficult to swing back to a hard crackdown?

Teresa: Yes, I hope the pendulum does not continue to swing back and forth like this.

I believe we can now promote some innovations in the U.S. that will make everything more stable. For example, SEC Chairman Paul Atkins wants to put all markets on-chain; once they are on-chain, it becomes very difficult to move them off-chain.

We should not shy away from or try to stop revolutionary technology; it is something we need to embrace. This is not limited to the financial services sector; it applies to all other application scenarios as well. Once we make progress in this direction, it becomes very difficult to revert to past technologies.

The Possibility of CZ Returning to Binance

• Pompliano: What changes have occurred at Binance after CZ's pardon? Will he return to Binance? Is Binance making any business adjustments? I'm not sure how much you know, but what is the current situation at Binance?

Teresa: He will not return to Binance right now. Binance is still facing all the restrictions from the Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), the Treasury Department (FinCen), and the Office of Foreign Assets Control (OFAC). This is just crazy; most companies only encounter accountability from one or two government agencies, but Binance has five, and this is without any fraud, no victims, and no criminal record.

Binance is still under the constraints of oversight mechanisms. The Treasury has arranged for a monitor through FinCen to ensure they comply with U.S. laws — even though Binance has been excluded from the U.S. and has no U.S. customers, they actually do not need to comply with U.S. laws at all.

I’m glad that the accusations against CZ have now been largely clarified, but the damage this has done to Binance and CZ is significant. However, I believe the biggest victim is actually the U.S.; Binance still has not been able to return to the U.S. market, which means we have lost the liquidity of the largest cryptocurrency exchange in the world. To be the largest market, you need the most liquidity; for example, users want more platform choices, and projects want to launch on the largest exchanges. But now that this exchange is not in the U.S., some people choose to launch projects outside the U.S. to get listed on Binance.

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