Binance Co-founder Changpeng Zhao Receives Pardon: An Analysis
President Donald Trump recently granted a pardon to Changpeng Zhao, the co-founder of Binance, the world’s largest cryptocurrency exchange. This action followed Zhao’s time in prison for failing to prevent money laundering activities on Binance. This move highlights a significant shift in approach toward the cryptocurrency industry under the Trump administration.
Key Points
- Trump pardoned Zhao after his prison sentence for Binance violations.
- The pardon reflects the administration’s support for the cryptocurrency industry.
- Zhao’s release preserved his ownership stake in Binance’s massive value.
- Binance Coin (BNB) increased in value following the presidential victory.
- The Justice Department reduced crypto enforcement efforts and closed investigations.
- This pardon aligns with a broader trend of clemency towards crypto figures.
Zhao’s legal trouble stemmed from a 2024 guilty plea. He admitted Binance didn’t have enough systems to stop criminals from using the exchange to move money. This included allowing connections to groups like Hamas and violating US sanctions by letting people trade with Iran.
Specifically, authorities found that between 2018 and 2022, Binance processed over 1.1 million transactions that broke US rules, totaling about $898 million. This highlighted serious gaps in Binance’s compliance procedures.
The situation forced Zhao to step down as Binance’s CEO, but he was able to keep control of the company, which saw a big jump in value shortly after Trump won the election. Zhao is now worth approximately $54.5 billion.
Binance Coin (BNB), the cryptocurrency linked to Binance, also increased in price as news of the pardon spread. This demonstrates the market’s reaction to the change in regulatory climate.
Furthermore, Trump has used his power to pardon other figures involved in the crypto industry, including Ross Ulbricht, the founder of the Silk Road marketplace, and the founders of BitMEX. These actions indicate a deliberate effort to shift the focus of enforcement.
The Justice Department has also reduced its cryptocurrency enforcement team and closed existing investigations that didn’t fit with the administration’s new priorities. This signals a reduction in scrutiny of exchanges and other crypto services.
“Ultimately, this pardon demonstrates a strategic prioritization of the crypto industry by the current administration.”
