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Binance’s Strategic Move in Trump’s Crypto Venture
According to a recent report, Binance, a prominent cryptocurrency exchange, played a significant role in the financial success of a cryptocurrency initiative linked to the Trump family, just prior to Donald Trump granting a pardon to its co-founder. This development underscores the potential resurgence of the company in the U.S. market.
Changpeng Zhao, commonly referred to as “CZ,” received a pardon from Trump last week after the administration accused him of being unfairly targeted by the Biden Administration amid its regulatory efforts against cryptocurrencies. As part of a $4.3 billion settlement with the Justice Department, Zhao had previously pleaded guilty to charges related to money laundering and agreed to resign as Binance’s CEO, serving four months in prison.
With Trump’s victory in the 2024 election, which he has positioned as favorable to cryptocurrency, Zhao’s company reportedly seized the opportunity to engage with the Trump-affiliated crypto venture, World Liberty Financial. The Wall Street Journal revealed that Binance established a high-level task force to negotiate a partnership with World Liberty, embarking on a long-term campaign seeking clemency for Zhao.
Trump Family’s Investment in World Liberty
Members of the Trump family, through an umbrella organization, reportedly hold a majority stake in World Liberty. Following Binance’s involvement, the company’s stablecoin product—intended to maintain a consistent value equivalent to the U.S. dollar—experienced a dramatic increase in valuation, skyrocketing from $127 million to over $2.1 billion this spring. The technology underpinning this stablecoin, known as USD1, was developed by Binance, and shortly after its launch, an Emirati state-backed fund called MGX invested $2 billion into Zhao’s firm. This investment allowed World Liberty to potentially earn millions in interest.
World Liberty has stated that Binance was not a part of the arrangement with MGX, while a legal representative for Binance emphasized that Zhao did not facilitate or finance the deal between MGX and the Trump family’s cryptocurrency initiative.
As Zhao’s pardon unfolds, Binance is likely to regain its footing in the U.S. following a ban imposed in 2023. World Liberty has clarified that discussions regarding Zhao’s pardon were never held, with their lawyer asserting that the company had not influenced the pardon decision. World Liberty expressed support for Zhao’s pardon, claiming that many victims of the Biden Administration’s legal actions have deserved similar relief.
Concerns Surrounding Trump’s Pardon Decision
In recent comments, Trump indicated that the pardon was granted “at the request of many good people,” though some within his administration expressed worries about the implications of this decision. White House Press Secretary Karoline Leavitt reiterated that neither Trump nor his family has been involved in any conflicts of interest.
Zhao was released from prison in September, and following Trump’s electoral win, he and Binance co-founder Yi He, who is also his partner, began mingling with notable figures, including members of Trump’s circle. In December, they hosted guests at a yacht in Abu Dhabi during the Grand Prix, including Errol Musk and Bilal bin Saqib, a tech entrepreneur who later became an advisor to World Liberty. Reports suggest Zhao also met with Eric Trump and Steve Witkoff, now serving as Trump’s special envoy, at a bitcoin conference, although both parties denied any interaction at the event.
In April, Zhao was seen dining with Zack Witkoff, son of Steve Witkoff, Saqib, and others associated with MGX at a beachfront restaurant. Zhao’s guilty plea was part of a substantial settlement with the Justice Department, which investigated Binance for multiple regulatory violations, including the Bank Secrecy Act.
Legal Backlash and Political Repercussions
Federal prosecutors alleged that Binance had failed to adhere to essential legal standards, permitting various illicit activities on its platform. Zhao admitted to not maintaining an adequate anti-money laundering system, violating the Bank Secrecy Act, which culminated in his resignation.
Prominent Democratic figures, such as Senator Elizabeth Warren, criticized Trump’s decision to pardon Zhao, highlighting his guilty plea and involvement in the cryptocurrency venture that benefited from the pardon. Warren emphasized the need for Congress to address such corruption in ongoing market structure legislation. Similarly, Democratic Representative Jerry Nadler condemned the pardon as a disgraceful abuse of power.
Even some of Trump’s supporters voiced their disapproval of Zhao’s pardon. Joe Lonsdale, a co-founder of Palantir Technologies, remarked that Trump has received poor advice regarding this decision, suggesting it creates an appearance of widespread fraud. Additionally, Laura Loomer, a close associate of Trump, expressed concerns about the implications of Zhao’s actions and his citizenship status. In response, Zhao has stated that he no longer holds Chinese citizenship.
Representatives from Binance contended that under the Trump administration, Zhao’s actions would not have faced prosecution, reiterating their position to the Wall Street Journal.
