Changpeng ‘CZ’ Zhao, the richest man in crypto, has been granted a pardon from President Donald Trump, marking a dramatic reversal of a yearslong federal crackdown on crypto.
Zhao, who founded cryptocurrency exchange Binance in 2017 and is worth an estimated $85 billion, pled guilty to violating anti-money laundering laws in 2023 and served four months in prison.
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Binance, the world’s biggest crypto exchange in terms of daily trading volume, allows customers to buy, sell, and hold cryptocurrencies on its platform. Trump signed the pardon Wednesday, which forgave Zhao’s conviction and could ease barriers to any future role at the company, though legal and compliance restrictions remain.
“President Trump exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency,” White House Press Secretary Karoline Leavitt said on Thursday. “The Biden Administration’s war on crypto is over.”
Zhao lobbied the Trump Administration for a pardon, including via lawyer and lobbyist Ches McDowell, a longtime friend of Trump’s son Don Jr.
Binance also has ties to the Trump family’s crypto start-up World Liberty Financial, prompting criticism from Democratic lawmakers who have called the pardon a form of corruption.
Trump undoes Biden-led crackdown on crypto crime
Zhao is the latest of a number of high-profile crypto businessmen to receive a pardon since Trump took office this year. Days after his second-term inauguration, Trump granted clemency to Ross Ulbricht, who operated Silk Road, a dark web drug marketplace powered by Bitcoin. And in March, Trump pardoned Arthur Hayes, co-founder of crypto exchange BitMEX who had pled guilty to money-laundering violations. Hayes was quick to congratulate Zhao on Thursday, posting on X: “Welcome to the club @cz_binance”.
Trump has changed his tune on crypto over the years, from once calling Bitcoin “a scam against the dollar” to promising to make the U.S. the “crypto capital of the world.” He has launched a Trump memecoin, while his family last year entered into a new crypto venture. The President has also issued an executive order establishing a U.S. crypto stockpile, and set up the White House position of “crypto czar.” After announcing that he would accept cryptocurrency donations to his 2024 presidential campaign, the crypto community embraced Trump, pouring donations into his campaign and turning to him to roll back what they saw as unfair targeting by the Biden Administration.
U.S. regulators have also dismissed a major lawsuit against Coinbase, the largest U.S.-based cryptocurrency exchange, while Trump has slashed regulations for cryptocurrency and issued new regulations that benefit the industry.
The Department of Justice and Internal Revenue Service, under the Biden Administration, placed Binance under investigation in 2021, although Seattle prosecutors reportedly began investigating the company in 2018, after cases of criminals using the platform to move illegal money. Zhao and Binance pled guilty in November 2023 to failing to comply with U.S. laws for preventing money laundering, which had allowed people in sanctioned countries, including terrorist groups, to move money on the platform.
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” then-Treasury Secretary Janet Yellen said in 2023.
As part of the settlement, Binance agreed to pay more than $4 billion, remediate their anti-money laundering and sanctions compliance programs, and retain an independent compliance monitor for three years. That latter term has reportedly been up for consideration by prosecutors last month, even as Sen. Elizabeth Warren (D-Mass.) has urged the DOJ to ensure Binance is complying with the “ongoing requirements” of the settlement. Zhao served four months in prison—a relatively light sentence compared to his counterparts at other cryptocurrency firms—and stepped down as chief executive of Binance. He retained his majority stake in the company.
The Securities and Exchange Commission also filed charges against Binance and Zhao in June 2023, alleging that the platform had illegally served U.S. users and misused customer funds. The SEC formally dropped its lawsuit in May.
Zhao’s pardon could allow him to return to running Binance. Last month, Zhao changed his profile description on X from “ex-@Binance” to “@Binance”, fuelling speculation that he was planning to return to the company.
“Deeply grateful for today’s pardon and to President Trump for upholding America’s commitment to fairness, innovation, and justice,” Zhao posted on X on Thursday. “Will do everything we can to help make America the Capital of Crypto and advance web3 worldwide.”
Binance posted on X, “Incredible news of CZ’s pardon today! Thank you, President Trump @POTUS for your leadership and for your commitment to make the US the crypto capital of the world!”
A Chinese-born Canadian businessman, Zhao has continued to be one of the most influential figures in the crypto world, even after his guilty plea. After his release in September last year, he has made appearances on several crypto podcasts. He became a dual citizen of the United Arab Emirates, where he now lives. Zhao is also known for having tweeted in 2022 that Binance would sell its holdings of then-rival FTX’s token, FTT, which led to a selloff and the collapse of FTX.
Binance deal with Trump family prompts criticisms
The Trump Administration’s deregulation of the crypto industry and rollback of the previous Administration’s crackdown on crypto crime come as the Trump family has deepened its investments in crypto.
Last year, Trump’s sons co-founded World Liberty Financial, alongside the sons of Trump’s Middle East envoy Steve Witkoff. Trump is listed as “co-founder emeritus” on the company’s website. The Trump family owns around 25% of World Liberty’s tokens, which earned them around $5 billion in paper wealth after the WLFI tokens became available to trade.
The company has developed close ties with Binance, which reportedly wrote the basic code to power World Liberty’s stablecoin, USD1. In May, MGX, an Abu Dhabi-led investment firm, used USD1 to invest $2 billion in Binance, which could net the Trumps tens of millions of dollars per year.
The ties between Binance and World Liberty have led some lawmakers and others to call Zhao’s pardon a form of corruption.
“This is yet another example of the administration’s brazen flouting of the rule of law,” Eswar Prasad, an economics professor at Cornell University, told the New York Times. “There is little justification for this pardon and highlights how far this administration will go to promote the cryptocurrency industry.”
Warren said in a statement, “First, Changpeng Zhao pleaded guilty to a criminal money laundering charge. Then he boosted one of Donald Trump’s crypto ventures and lobbied for a pardon. Today, Donald Trump did his part and pardoned him. If Congress does not stop this kind of corruption in pending market structure legislation, it owns this lawlessness.” Warren, alongside Sen. Jeff Merkley (D-Ore.), called for a probe into the MGX-Binance deal in June.
Sen. Thom Tillis (R, N.C.) told reporters on Thursday that the pardon sends “a bad signal.” He added that Zhao “was convicted. He’s not innocent.”
The pardon also comes as lawmakers work toward a bipartisan deal on a landmark bill that would establish new crypto regulations.
“The President and the White House have a very thorough examination of every pardon request that comes to the President’s desk,” Leavitt told reporters on Thursday.
“This was an overly prosecuted case by the Biden Administration,” she added. “The previous Administration was very hostile to the cryptocurrency industry. The President wants to correct this overreach of the Biden Administration’s misjustice.”