**Trump Pardons Binance Founder Changpeng Zhao Amid Controversy**
US President Donald Trump has pardoned Binance founder Changpeng Zhao, creator of the world’s largest cryptocurrency exchange. Zhao had been imprisoned last year for failing to prevent criminals from using his platform to launder money linked to child sex abuse, “terrorism,” and drug trafficking.
White House press secretary Karoline Leavitt said on Thursday that Trump had “exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency.”
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### Background on Zhao’s Conviction
Zhao was released from prison in September 2024 after serving a four-month sentence for violating the US Bank Secrecy Act, the first person ever imprisoned under this law, which was enacted in 1970. The act mandates that financial institutions know their customers, monitor transactions, and file reports of suspicious activity.
Prosecutors stated Zhao repeatedly ignored these regulations between 2017 and 2024. The judge for the Western District of Washington expressed concern over Zhao’s disregard for US banking rules, noting his “better to ask for forgiveness than permission” approach.
During this period, Binance reportedly facilitated over 1.5 million virtual currency trades totaling approximately $900 million that violated US laws and sanctions, including those related to al-Qaeda and Iran. Drug trafficking networks and organizations linked to child sexual exploitation allegedly used Binance to move illicit funds anonymously. Binance’s weak customer verification and tolerance of high-risk transactions made it a hub for illegal activities, prosecutors claimed.
In November 2023, Zhao pleaded guilty to one count of failing to monitor money laundering at his company and was barred from operating within the US. Binance agreed to pay $4.3 billion to settle other Department of Justice allegations.
At sentencing, Zhao expressed remorse, stating: “I failed here. I deeply regret my failure, and I am sorry.”
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### Zhao’s Background and the Impact of the Pardon
Zhao grew up in rural China and emigrated with his family to Canada after the 1989 Tiananmen Square massacre. Fascinated by technology, he studied computer science at McGill University before cofounding Binance in 2017.
The pardon lifts restrictions preventing Zhao from running US ventures again and could pave the way for his return to Binance, which remains operational since his arrest. Zhao is notably known as the former rival of Sam Bankman-Fried, founder of FTX, who was convicted of stealing $10 billion in customer funds.
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### Why Did Trump Pardon Zhao?
At a White House briefing, Trump defended his decision, stating, “A lot of people say that he wasn’t guilty of anything. He served four months in jail, and they say that he was not guilty of anything.” Trump added, “I gave him a pardon at the request of a lot of very good people… I’ve been told that what he did is not even a crime.”
Press secretary Leavitt said the White House counsel thoroughly reviewed the pardon request. She criticized the Biden administration for “an egregious over-sentencing” and being “very hostile to the cryptocurrency industry.” According to Leavitt, Trump “wants to correct this overreach.”
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### Trump’s Approach to Cryptocurrency Industry
During his 2024 presidential campaign, Trump promised a friendlier stance toward the crypto industry compared to his predecessor. He received substantial campaign donations from crypto players.
Since returning to office in 2025, Trump has loosened regulations, pursued the establishment of a national cryptocurrency reserve, and disbanded the government’s crypto-enforcement team.
Zhao’s pardon follows similar clemency moves, including the halting of a fraud case against cryptocurrency entrepreneur Justin Sun and pardons for BitMEX cofounders convicted of violating the US Bank Secrecy Act.
However, some voices have raised concerns. Joe Lonsdale, cofounder of data software company Palantir, tweeted that Trump had been “terribly advised” on recent pardons, suggesting they “make it look like massive fraud is happening around him.” Democratic Senator Elizabeth Warren condemned the pardon as “a kind of corruption.”
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### Allegations of Conflict of Interest
Critics argue there is a conflict of interest in Trump’s pardon of Zhao. Robert Reich, economist and former Labor Secretary, called it part of a “Pay-to-Pardon Scheme,” highlighting Zhao’s ties to boosting the Trump family’s crypto business.
Trump and his family own World Liberty Financial, a crypto firm closely linked to Binance. In March 2025, World Liberty launched “USD1,” a dollar-pegged stablecoin backed by US treasuries and issued on Binance’s blockchain.
Binance promoted USD1 to its 275 million users. The stablecoin was supported by the UAE’s MGX Fund Management, which used $2 billion worth of USD1 tokens to acquire a stake in Binance. According to the New York Times, this deal could generate tens of millions for the Trump family.
The White House maintains that Trump has no conflicts of interest with Binance, as his crypto assets are held in a trust without his oversight. However, as of September, Trump reportedly holds nearly 15.75 billion tokens in World Liberty Financial, valued at over $3.4 billion, making crypto his most significant source of wealth, alongside real estate.
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### Market Reaction
Following Trump’s announcement of the pardon, Binance’s associated token BNB surged by 8 percent, reflecting investor optimism.
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*This article will be updated as more information becomes available.*
https://www.aljazeera.com/news/2025/10/24/is-trumps-pardon-of-binance-boss-changpeng-zhao-a-conflict-of-interest?traffic_source=rss
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