Liv McMahontechnology reporter
Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, received a pardon from US President Donald Trump.
Zhao, also known as ‘CZ’, was sentenced to four months in prison in April 2024 after pleading guilty to violating US money laundering laws.
Binance also pleaded guilty and was ordered to pay $4.3 billion (£3.4 billion) after a US investigation found it helped users circumvent sanctions.
The pardon has reignited debate about the White House’s embrace of cryptocurrencies as the Trump family’s investments in the cryptocurrency industry deepen.
White House press secretary Carolyn Levitt called Zhao’s prosecution under the Biden administration part of the “war on cryptocurrencies” and dismissed critics who said the pardon appeared to be motivated by Trump’s personal financial interests.
“This is a case of excessive prosecution by the Biden administration,” she said, adding, “It has been thoroughly reviewed.” “So the president wants to right the injustices of the Biden administration and has exercised his constitutional authority to do so.”
Binance spent nearly a year seeking a pardon for its former boss, who will complete his four-month prison sentence in September 2024, the WSJ reported Thursday.
The campaign comes as Trump, who launched his own coin ahead of his inauguration in January, promised a friendlier approach to the industry than his predecessor.
Since then, he has sought to ease regulation, establish a national cryptocurrency reserve, and push to make it easier for Americans to use their retirement savings to invest in digital assets.
“I am deeply grateful to President Trump for today’s pardon and for supporting America’s commitment to fairness, innovation, and justice,” Zhao, who will step down as Binance CEO in 2023, wrote on social media on Thursday.
The pardon lifts restrictions that had prevented Zhao from running financial ventures, but it is not yet clear whether it will change his stance with U.S. regulators or his ability to lead Binance directly.
In a statement, Binance called the decision “surprising news.”
Registered in the Cayman Islands, the exchange remains the world’s most popular platform for buying and selling cryptocurrencies and other digital assets.
It did not respond to additional questions regarding the conflict of interest claims.
Before the pardon, Zhao’s companies partnered with companies linked to Donald Trump on new digital currency projects, including Dominari Holdings, which is headquartered in Trump Tower and where his sons serve as advisors.
The Wall Street Journal also previously reported that representatives of the Trump family, which owns its own cryptocurrency company, World Liberty Financial, recently held talks with Binance.
The Trump administration previously dropped its fraud case against cryptocurrency entrepreneur Justin Sun, who had invested in the Trump family’s cryptocurrency company World Liberty Financial.
He also pardoned the founder of cryptocurrency exchange BitMex, who had been accused of money laundering, and Ross Ulbricht, the founder of dark web marketplace Silk Road, a known drug-dealing hotspot.
Palantir co-founder Joe Lonsdale wrote on social media that he loves Trump but that the president had been “seriously advised” against a pardon.
“It appears there is a large-scale fraud going on around him in this area,” he said.
Democratic Senator Elizabeth Warren criticized the decision in a statement, calling it “a kind of corruption.”
When asked Thursday about his decision to pardon Mr. Zhao, Mr. Trump appeared to have no idea who he was.
“Are you talking about a cryptocurrency expert?” He later asked, saying he was granted a pardon “at the request of many good people.”
When U.S. officials announced Binance’s guilty plea in 2023, they said Binance and Zhao were responsible for “willful violations” of U.S. laws that threatened the financial system and national security.
“Binance ignored its legal obligations in its pursuit of profits,” said then-Treasury Secretary Janet Yellen.
“Intentional failures allowed money to flow through the platform to terrorists, cybercriminals and child abusers.”
Zhao stepped down as CEO of Binance as part of the resolution of the case, and wrote at the time that resigning was “the right thing to do.”
“I made a mistake and I have to take responsibility,” he said.
Reported by Bernd Debussman Jr.
