President Donald Trump's recent pardon of Changpeng Zhao, the billionaire founder of the cryptocurrency exchange Binance, has sparked widespread debate about the intersection of politics, finance, and criminal justice. Zhao, who pleaded guilty to money laundering charges two years ago, was granted clemency last week, allowing him to avoid further legal repercussions despite his company's involvement in facilitating transactions for terrorist groups and other illicit actors.
According to court records from Zhao's 2022 guilty plea, Binance agreed to pay $4.3 billion to U.S. authorities as part of a settlement. Zhao himself paid a $50 million fine, was banned from running the company, and received a four-month prison sentence. The Chinese-born Canadian entrepreneur, often known by his initials CZ, had built Binance into the world's largest crypto exchange, but it came under scrutiny for lax anti-money laundering controls that allegedly allowed it to serve clients including al-Qaida, ISIS, Hamas, ransomware hackers, and those involved in child pornography.
Jim Geraghty, writing in National Review, described the pardon as an act “stunning in its shamelessness, recklessness, and moral inversion.” He highlighted how few financial institutions were willing to engage with such high-risk clients, yet Binance “answered the call.” Geraghty's commentary underscores the pardon's controversial nature, positioning it as another step into what he called the “muck” for Trump.
The timing of the pardon has raised questions about potential conflicts of interest. Binance, where Zhao still owns the bulk of shares, provided the basic code for a stablecoin issued this year by World Liberty Financial, a crypto firm associated with the Trump family. Max Chafkin, in a Bloomberg piece, suggested that the pardon might be linked to this business relationship, noting that it could be helping “put billions into the Trump family coffers.” Chafkin dismissed Trump's portrayal of Zhao's prosecution as a “Biden-era crypto witch-hunt,” pointing to court records where Binance executives reportedly “joked about Hamas operatives using the service to buy weapons.”
Trump's decision fits into a broader pattern of clemency for individuals convicted of financial crimes. Alex Kirshner, reporting for Slate, noted that Trump is on an unprecedented “run of pardoning financial crooks,” having already pardoned or commuted sentences for 18 people or companies guilty of fraud. Among them are Trevor Milton, the founder of electric truck company Nikola, who was convicted of cheating investors, and Ross Ulbricht, who received two life sentences for operating the dark-web drug marketplace Silk Road.
Zhao's case dates back to investigations that revealed Binance's role in enabling illicit transactions. Founded in 2017, the exchange quickly grew to handle trillions in trading volume, but U.S. regulators accused it of violating sanctions and anti-money laundering laws. In one instance, officials said the platform was used by Iranian users to bypass restrictions, and by North Korean entities for similar purposes. Zhao stepped down as CEO following the plea deal, but his influence persists through his significant ownership stake.
Kyla Scanlon, in an opinion piece for The New York Times, framed the pardon as an invitation for a key player back into the “casino economy.” She argued that Trump campaigned on rebuilding U.S. manufacturing but has instead fostered an economy “built on speculation and risk.” Scanlon pointed to the rise of “pointless crypto tokens” and overhyped AI companies as beneficiaries, while ordinary people “bear the downside risk, while corporations and the wealthy collect the upside.” She likened it to a casino where “the house always wins.”
The pardon comes amid Trump's vocal support for the cryptocurrency industry. During his campaign, he positioned himself as a pro-crypto candidate, promising to make the U.S. the “crypto capital of the planet.” This stance contrasts with the Biden administration's regulatory crackdown, which included actions against Binance and other exchanges. Trump's family venture, World Liberty Financial, launched its stablecoin in 2023, reportedly using code derived from Binance's technology, though details of the exact arrangement remain unclear.
Critics from various political perspectives have weighed in. On the right, Geraghty's National Review piece expressed dismay at the moral implications, while left-leaning outlets like Slate and The New York Times highlighted economic inequalities exacerbated by such decisions. Bloomberg's Chafkin provided a business angle, emphasizing the potential financial motivations. No major sources have defended the pardon outright, but Trump has publicly justified it by claiming overreach by previous administrations.
President Trump took another step into the muck last week, said Jim Geraghty in National Review, with an act “stunning in its shamelessness, recklessness, and moral inversion”: he officially pardoned Changpeng Zhao, the billionaire founder of the global crypto exchange Binance.
Broader economic implications are also under discussion. Scanlon's Times piece connected the pardon to Republican attacks on institutions like the Federal Reserve and cuts to the social safety net to fund corporate tax cuts. This, she said, shifts risks onto everyday Americans while rewarding speculative ventures. The crypto market, valued at over $2 trillion as of late 2023, has seen volatile swings, with Binance handling a significant portion of global trades despite its legal troubles.
Zhao, now 47, has maintained a low profile since his release from prison earlier this year. He served his four-month sentence in a low-security facility in California and has since focused on philanthropy and education initiatives. However, the pardon removes any lingering restrictions, potentially allowing him to re-engage with the industry. Binance, meanwhile, continues operations under new leadership, with its market dominance intact.
Looking ahead, the pardon could influence ongoing debates about cryptocurrency regulation. With Trump back in the White House, experts anticipate a lighter regulatory touch, possibly including the creation of a national crypto reserve as he proposed. This shift might benefit figures like Zhao but raises concerns about money laundering and financial stability. As Kirshner noted in Slate, the pattern of pardons for fraudsters signals a permissive environment for white-collar crime.
In the context of global tech and finance, the decision intersects with other developments. For instance, recent U.S.-U.K. tech pacts supported by companies like Nvidia and OpenAI aim to solidify American AI leadership, while stock markets grow reliant on tech valuations. Wikipedia's neutrality struggles and the rise of AI in mental health add layers to the tech landscape, but Zhao's pardon stands out as a direct political intervention in finance.
Ultimately, the pardon of Changpeng Zhao exemplifies the evolving relationship between political power and the crypto world. As debates continue, it remains to be seen how this will affect U.S. economic policy and international perceptions of American justice. Observers will watch closely for any further clemency actions from the Trump administration, which has already set a record pace in this area.