How Zhao’s Binance aided Trump family crypto venture before pardon

[NEW YORK] In late October, US President Donald Trump pardoned crypto billionaire Zhao Changpeng, one of the industry’s most powerful men, after he mounted a months-long bid for clemency.

Zhao pleaded guilty in 2023 to violating US law by failing to run an appropriate anti-money laundering programme during his tenure as chief executive officer of Binance Holdings, the industry-leading crypto exchange he founded. He was sentenced to four months in prison and stepped down as head of the exchange.

Binance later built up ties to World Liberty Financial, a crypto platform co-founded by members of the Trump family and a pillar of the family’s more than US$7 billion fortune.

Asked why he pardoned Zhao in an interview on CBS’s 60 Minutes that aired Nov 2, Trump said: “I don’t know who he is.”

Zhao is the latest prominent crypto figure to receive a pardon in Trump’s second term. Here’s what to know.

Who is Changpeng Zhao?

Zhao is the billionaire founder of Binance Holdings, the world’s largest crypto exchange by volume. Zhao, an industry celebrity often referred to by his initials “CZ”, was released from custody in September 2024. Following his pardon, Zhao wrote on X that he was “deeply grateful” for the president’s action.

What was Zhao convicted of?

Zhao and Binance admitted the company had failed to set up appropriate money-laundering safeguards on the exchange. Following a years-long investigation, federal prosecutors said that as a result of Binance’s lax controls, terrorist groups, hackers and sanctions violators used its platform to move billions of US dollars. Janet Yellen, who was Treasury Secretary at the time of the conviction, said the exchange had “turned a blind eye to its legal obligations in the pursuit of profit”.

The guilty plea marked a sobering turn for a crypto celebrity. In addition to Zhao resigning from his role, the exchange agreed to pay a more than US$4 billion penalty. But Zhao was not forced to give up his controlling stake in Binance, which is the source of his US$61.4 billion fortune, according to the Bloomberg Billionaires Index.

The Securities and Exchange Commission (SEC) also charged Zhao and Binance with additional infractions in 2023 – but earlier this year, the SEC dropped its case against him.

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How do Zhao and Trump’s crypto ventures intersect?

Binance is linked to a Trump family crypto venture, called World Liberty Financial, in multiple ways.

Binance wrote the basic code underpinning World Liberty’s stablecoin, called USD1, a virtual asset designed to maintain a one-to-one value with the US dollar.

Weeks after World Liberty’s stablecoin USD1 launched, an Emirati state-backed fund called MGX used it to invest US$2 billion into Binance. The move was an early financial boost for USD1. Stablecoin issuers earn interest from the reserves backing them – there are dozens to choose from, all performing the same basic function. MGX’s decision to use the USD1 stablecoin gave World Liberty the chance to earn potentially tens of millions of US dollars in interest.

What does World Liberty Financial do?

World Liberty Financial is a crypto platform co-founded by Trump’s family and the family of his special envoy, Steve Witkoff. It has attracted scrutiny from ethics watchdogs, Congressional Democrats and even the occasional pro-crypto Trump supporter, who worry the Trump family’s crypto business could incentivise the president to shape policy to align with his own financial interests.

Trump’s family has denied that such potential conflicts exist, and the White House has said he’s “the most transparent president in history in all respects, including when it comes to his finances”.

In addition to its stablecoin USD1, World Liberty has its own branded virtual token, which became available to trade in a limited capacity in September.

How does the Trump family earn money from World Liberty Financial?

An entity affiliated with Trump and his family owns a 38 per cent stake of the parent company. Members of the family have also earned more than half a billion US dollars from token sales, according to Bloomberg estimates, and have a stash of 22.5 billion virtual tokens, worth hundreds of millions more on paper.

Has Trump pardoned other crypto figures?

Once a crypto sceptic who said Bitcoin “seems like a scam”, Trump has transformed into one of the industry’s biggest champions in his second term. Shortly after his inauguration, he pardoned Ross Ulbricht, who created the Bitcoin-based illicit drug market called Silk Road, and who had been sentenced to life in prison.

In March, he also pardoned Arthur Hayes, who had been convicted of violating federal money-laundering law at BitMEX, the exchange he co-founded and owned. BLOOMBERG