Why did Trump pardon convicted Binance founder? Was it business?

United States President Donald Trump pardoned Changpeng Zhao, the billionaire founder of Binance, the White House confirmed on Thursday.

Zhao — widely known as “CZ” — had been granted clemency just months after completing a four-month prison sentence for failing to prevent illicit money flows through the world’s largest cryptocurrency exchange.

The decision marks another high-profile example of Trump’s willingness to use presidential clemency for figures within industries politically or financially aligned with his administration.

It also follows a pattern of easing enforcement on the digital assets sector, which has seen significant deregulation under Trump’s leadership.

Zhao’s case had drawn international attention due to Binance’s massive global footprint and the US government’s contention that the company allowed criminals and sanctioned organisations to exploit its platform.

Prosecutors had accused Binance of enabling the transfer of funds tied to drug trafficking, terrorism financing, and child exploitation.

Despite this, the president opted to grant Zhao a full pardon. Trump defended the move by saying, “He was recommended by a lot of people. 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.”

He also claimed that Zhao had been “persecuted by the Biden administration” and that he had “been told” the Binance founder had significant public and industry support.

Why Zhao was imprisoned

Changpeng Zhao’s journey from a rural upbringing in China to the helm of the world’s leading cryptocurrency exchange is a story of rapid ascent.

After emigrating to Canada with his family following the 1989 Tiananmen Square massacre, Zhao worked menial jobs — including a stint at McDonald’s — before pursuing computer science and discovering blockchain technology.

He founded Binance in 2017, quickly transforming it into a global crypto powerhouse with daily trading volumes often exceeding $10 billion. But that meteoric rise came under increasing scrutiny from US regulators.

Zhao and Binance were charged with violating the Bank Secrecy Act, which mandates financial institutions to verify customers’ identities, monitor transactions, and report suspicious activities. Prosecutors said Binance ignored these requirements in pursuit of growth.

Court documents revealed that the company had allowed over 1.5 million trades valued at nearly $900 million that violated US sanctions, including transactions linked to Hamas’ al-Qassam Brigades, al-Qaida, and Iranian entities.

During sentencing last year, Zhao admitted fault, stating, “I failed here. I deeply regret my failure, and I am sorry.”

He became the first person ever sentenced to prison for violations of the Bank Secrecy Act on that scale. The presiding judge said he was “troubled” by Zhao’s approach to compliance, quoting his internal message to employees, “Better to ask for forgiveness than permission.”

Following his release, Zhao’s legal team formally requested a pardon, arguing that his offence was more regulatory than criminal.

How the White House defended Trump’s decision

Announcing the pardon, White House press secretary Karoline Leavitt said that Trump’s legal advisers had reviewed Zhao’s case “thoroughly” and concluded that his prosecution reflected excessive punishment under the prior administration.

Leavitt said the Biden administration had pursued “an egregious oversentencing” and was “very hostile to the cryptocurrency industry.”

She stated that Trump’s decision was aimed at “correcting this overreach” and reaffirming the president’s support for financial innovation.

Her remarks echoed sentiments within the crypto community, which had long accused Biden-era regulators of engaging in “regulation by enforcement.”

Many firms argued that aggressive prosecutions and opaque rulemaking had driven innovation overseas and discouraged investment.

Trump’s pardon of Zhao fits into this broader shift. Since his return to office, the administration has rolled back multiple enforcement initiatives introduced under Biden and disbanded the Justice Department’s crypto-focused enforcement team, signalling a new, pro-industry posture.

Mark Bini, a former federal prosecutor and now a white-collar defence attorney specialising in crypto regulation, described Zhao’s offense as “a regulatory matter, or at worst its kissing cousin.”

He added that, given Trump’s past clemency record and his administration’s pro-crypto stance, “this pardon, while it involves the biggest name in crypto, is not very surprising.”

How Binance is deeply linked to Trump’s crypto businesses

Beyond the question of fairness or policy, the pardon has drawn attention to Binance’s business ties to the Trump family’s cryptocurrency ventures. Since Trump’s re-election last year, his family has become a significant player in the digital asset sector.

The centrepiece of this expansion is World Liberty Financial, a sprawling crypto enterprise run by Trump and his sons Donald Jr and Eric.

It manages multiple digital assets, including a stablecoin named USD1, pegged to the US dollar, and a token called WLFI, whose market capitalisation now exceeds $3 billion.

In May, Binance played a key role in elevating World Liberty Financial’s profile when it accepted USD1 as payment in a $2 billion investment deal with Abu Dhabi–based MGX Investments.

The transaction not only validated the Trump-backed stablecoin but also positioned Binance as one of its primary global supporters.

According to disclosures, Binance’s decision to accept USD1 significantly boosted the token’s value and circulation. Analysts noted that the move gave legitimacy to Trump’s project, with USD1 continuing to represent most of the token’s total supply in the market.

Binance has also been a major supporter of the Trump family’s crypto ambitions since 2024, reportedly holding discussions about taking a financial stake in Binance.US, the company’s American affiliate.

Following the pardon announcement, World Liberty Financial’s token prices soared, with USD1 and WLFI both recording double-digit gains that far exceeded movements across the broader crypto market.

How Trump has been expanding his crypto empire

Trump’s embrace of digital assets represents a remarkable reversal from his earlier scepticism of cryptocurrencies. During his first presidency, he had described Bitcoin as “a scam.”

Yet by 2025, his family has developed one of the most extensive personal crypto portfolios ever held by a US political dynasty.

This transformation began in December 2022, when Trump launched his first NFT collection, which sold out within hours. That venture was followed by a personal memecoin, now valued at over $1 billion, signalling his shift from critic to advocate.

After his re-election, the Trump family rapidly expanded their footprint. World Liberty Financial became their flagship enterprise, complemented by Trump Media & Technology Group — originally focused on the social media platform Truth Social — which has since evolved into a Bitcoin holding company modelled after major corporate investors in the sector.

A newer addition, American Bitcoin, was formed after the Trump organisation absorbed operations from the mining firm Hut 8, creating one of the largest US-based crypto mining companies.

Eric Trump now oversees these mining activities under the American Bitcoin brand.

Together, these ventures have dramatically increased the family’s wealth, with combined crypto holdings estimated in the billions of dollars.

How Opposition reacted to Trump’s move

Democratic lawmakers, including Senator Elizabeth Warren, have been vocal in their condemnation vis-à-vis Trump’s pardon of Zhao.

“First, Changpeng Zhao pleaded guilty to a criminal money laundering charge. Then he boosted one of Donald Trump’s crypto ventures and lobbied for a pardon. Today, Donald Trump did his part and pardoned him,” Warren said.

In May, Warren and several Democratic senators on the Senate Banking, Housing, and Urban Affairs Committee released a joint statement warning about the growing overlap between Binance and the Trump administration.

They cautioned that “as the administration loosens oversight on an industry where bad actors have violated money laundering and sanctions law, it is not surprising that Binance, which has admitted to prioritizing its own growth and profits over compliance with U.S. law, would seek to roll back the oversight required by its settlement.”

The White House dismissed those allegations, stating that each clemency decision was independently evaluated by the White House Counsel’s Office and not influenced by personal or financial interests.

However, the optics remain complicated.

Trump’s campaign benefited from substantial donations and lobbying support from the crypto sector during the 2024 presidential race, after he vowed to end what he called the Biden administration’s “war on crypto.”

How Trump’s move fits into a broader pattern of crypto clemencies

Earlier this year, the US president pardoned three co-founders of BitMEX, who were convicted in 2022 for failing to implement anti-money laundering protocols.

In January, he also pardoned Ross Ulbricht, the founder of the Silk Road dark web marketplace, who had been serving a life sentence.

These decisions have been welcomed by many in the crypto industry, who view them as signs of a more innovation-friendly administration.

Supporters argue that overly aggressive enforcement under previous governments stifled growth in an industry critical to America’s technological leadership.

What next for Zhao

After his release, Zhao posted on X, “Will do everything we can to help make America the Capital of Crypto.”

While Binance declined to comment on the political aspects of the pardon, the company’s global operations remain under ongoing regulatory review in several jurisdictions, including the European Union and Japan.

It remains uncertain whether Trump’s decision will affect these international proceedings.

Legal analysts note that Zhao’s US pardon does not alter Binance’s past settlement obligations, including its $4.3 billion fine to the US government.

However, it may restore Zhao’s eligibility to re-engage in the company’s operations or serve on its board in the future.

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With inputs from agencies