The Trump administration has unexpectedly pardoned Changpeng Zhao, the billionaire founder of Binance, a move that has sent shockwaves through the US crypto industry. The pardon comes just over two years after Zhao was sentenced to prison for failing to maintain an effective anti-money laundering program at Binance.
Prior to his imprisonment, Zhao had pleaded guilty to violating US sanctions and failing to report suspicious transactions involving terror groups and cybercriminals. As part of a settlement deal, Zhao agreed to forfeit his role as Binance CEO and the company was forced to leave the US and accept supervision by a US-appointed compliance monitor. The company also paid a record $4.3 billion penalty.
However, in October, President Trump pardoned Zhao, declaring that he was a victim of the "Biden administration's war on crypto." This move has been met with skepticism from many in the industry, who point out that Zhao's alleged wrongdoing involved connections between Binance and World Liberty Financial, a crypto business founded by Trump and his sons.
Industry insiders are now bracing for a potential backlash from the Biden administration, which could lead to increased scrutiny of the crypto industry. "The [pardon] doesn't look good," says Azeem Khan, founder of crypto startup Miden. "There's going to be scorched earth to come with the midterm elections. There's not enough being codified into law yet."
Nic Carter, a general partner at crypto-focused VC firm Castle Island Ventures, agrees that Trump's pardon has raised concerns about conflicts of interest. "Neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest," says White House press secretary Karoline Leavitt.
The pardon also raises questions about the long-term implications for US-based crypto exchanges, which could potentially be disrupted by Binance's return to the market. Coinbase, the largest US-based exchange, has already taken steps to expand its offerings and increase competition with Binance.
"The [pardon] opens the door for the US government to formally release Zhao and Binance from their obligations," says Daniel Silva, a partner at law firm Buchalter. Meanwhile, Zhao may feel emboldened to return to an active role at Binance either way.
The pardon has also sparked concerns about cronyism and self-dealing in Trump's crypto activities, which could have far-reaching consequences for the industry. "Fees get squeezed, and you have to scale to win," says Chris Perkins, a partner at crypto venture capital firm CoinFund. "There's going to be some holy or unholy alliances."
Ultimately, the pardon has highlighted the need for greater regulation and oversight of the US crypto market, as well as increased transparency around conflicts of interest and industry practices.
Prior to his imprisonment, Zhao had pleaded guilty to violating US sanctions and failing to report suspicious transactions involving terror groups and cybercriminals. As part of a settlement deal, Zhao agreed to forfeit his role as Binance CEO and the company was forced to leave the US and accept supervision by a US-appointed compliance monitor. The company also paid a record $4.3 billion penalty.
However, in October, President Trump pardoned Zhao, declaring that he was a victim of the "Biden administration's war on crypto." This move has been met with skepticism from many in the industry, who point out that Zhao's alleged wrongdoing involved connections between Binance and World Liberty Financial, a crypto business founded by Trump and his sons.
Industry insiders are now bracing for a potential backlash from the Biden administration, which could lead to increased scrutiny of the crypto industry. "The [pardon] doesn't look good," says Azeem Khan, founder of crypto startup Miden. "There's going to be scorched earth to come with the midterm elections. There's not enough being codified into law yet."
Nic Carter, a general partner at crypto-focused VC firm Castle Island Ventures, agrees that Trump's pardon has raised concerns about conflicts of interest. "Neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest," says White House press secretary Karoline Leavitt.
The pardon also raises questions about the long-term implications for US-based crypto exchanges, which could potentially be disrupted by Binance's return to the market. Coinbase, the largest US-based exchange, has already taken steps to expand its offerings and increase competition with Binance.
"The [pardon] opens the door for the US government to formally release Zhao and Binance from their obligations," says Daniel Silva, a partner at law firm Buchalter. Meanwhile, Zhao may feel emboldened to return to an active role at Binance either way.
The pardon has also sparked concerns about cronyism and self-dealing in Trump's crypto activities, which could have far-reaching consequences for the industry. "Fees get squeezed, and you have to scale to win," says Chris Perkins, a partner at crypto venture capital firm CoinFund. "There's going to be some holy or unholy alliances."
Ultimately, the pardon has highlighted the need for greater regulation and oversight of the US crypto market, as well as increased transparency around conflicts of interest and industry practices.
this is wild - trump just pardoned changpeng zhao, a guy who got in trouble with the law for failing to stop money laundering on his crypto platform... it's like he's trying to help out his buddies in the crypto space 
i'm not buying it at all. there's gotta be some serious pressure from trump and his team to get this done before the midterms 
and now we're gonna see what kinda chaos ensues with binance coming back into the game 
i just wanna know how many more ppl are gonna get off scot-free because of trump's connections 
I'm so confused about this pardon thingy... like, why did Trump just go and pardon Zhao out of nowhere? 
Is there something we're missing here? 
I'm not sure if it's a good thing for the crypto industry or what... maybe they should just keep a closer eye on those involved, you know? 
. And honestly, who knows what's really going on here? Some people are saying it's all about cronyism and self-dealing... I don't know about that, but I do know one thing - this whole pardon thing is definitely going to make the industry super nervous 
.
This pardon is super sketchy... I mean, think about it - Changpeng Zhao got a slap on the wrist after causing 4.3 BILLION dollars in fines for violating sanctions and failing to report suspicious transactions? That's like getting off with a warning for running a massive Ponzi scheme! 
This pardon is a total joke! I mean, come on, $4.3 billion in penalties and now just a slap on the wrist? It's like he was playing a game of " Crypto roulette" and won 
. And what really gets me is that it's just two years after he was supposed to start serving his sentence... does this set a bad precedent for future crypto execs? 
can't wait to see what kind of drama unfolds w/ midterms coming up 
cuz its shady but also kinda expected given trumps track record 
, industry insiders are saying there's gonna be major backlash 
, need some more regulation ASAP 
. Now, the whole crypto space is on edge wondering what's next. Will Binance come back to US? Will Coinbase crush them? I'm kinda rooting for the latter 
. And don't even get me started on the anti-money laundering program thing... Zhao was supposed to rot in prison for that 
.
He was supposed to get 4 years in the slammer for violating sanctions and not reporting suspicious transactions but Trump just waved his wand and said 'peace out' 
u guys think biden admin will do something about it or just let it slide??