WASHINGTON — President Trump has pardoned Binance founder Changpeng Zhao, who created the world’s largest cryptocurrency exchange and served prison time for failing to stop criminals from using the platform to move money connected to child sex abuse, drug trafficking and terrorism.
The pardon caps a monthslong effort by Zhao, a billionaire commonly known as CZ in the crypto world and one of the biggest names in the industry. He and Binance have been key supporters of some of the Trump family’s crypto enterprises.
“Deeply grateful for today’s pardon and to President Trump for upholding America’s commitment to fairness, innovation, and justice,” Zhao said on social media Thursday.
Zhao’s pardon is the last move by a president who has flexed his executive power to bestow clemency on political allies, prominent public figures and others convicted of crimes.
White House press secretary Karoline Leavitt announced the pardon in a statement and later told reporters in a briefing that the White House counsel’s office “thoroughly reviewed” the request. She said the administration of Democratic President Biden pursued “an egregious oversentencing” in the case, was “very hostile to the cryptocurrency industry” and Trump “wants to correct this overreach.”
The crypto industry has also long complained it was subject to a “regulation by enforcement” ethos under the Biden administration. Trump’s pardon of Zhao fits into a broad pattern of his taking a hands-off approach to an industry that spent heavily to help him win the election in 2024. His administration has dropped several enforcement actions against crypto companies that began during Biden’s term and disbanded the crypto-related enforcement team at the Justice Department.
Former federal prosecutor Mark Bini said Zhao went to prison for what “sounds like a regulatory offense, or at worst its kissing cousin.”
“So this pardon, while it involves the biggest name in crypto, is not very surprising,” said Bini, a white collar defense lawyer who handles crypto issues at Reed Smith.
Zhao was released from prison last year after receiving a four-month sentence for violating the Bank Secrecy Act. He was the first person ever sentenced to prison time for such violations of that law, which requires U.S. financial institutions to know who their customers are, to monitor transactions and to file reports of suspicious activity. Prosecutors said no one had ever violated the regulations to the extent Zhao did.
The judge in the case said he was troubled by Zhao’s decision to ignore U.S. banking requirements that would have slowed the company’s explosive growth.
“Better to ask for forgiveness than permission,” was what Zhao told his employees about the company’s approach to U.S. law, prosecutors said. Binance allowed more than 1.5 million virtual currency trades, totaling nearly $900 million, that violated U.S. sanctions, including ones involving Hamas’ al-Qassam Brigades, Al Qaeda and Iran, prosecutors said.
“I failed here,” Zhao told the court last year during sentencing. “I deeply regret my failure, and I am sorry.”
Zhao had a remarkable path to becoming a crypto billionaire. He grew up in rural China and his family immigrated to Canada after the 1989 Tiananmen Square massacre. As a teenager, he worked at a McDonald’s and became enamored with the tech industry in college. He founded Binance in 2017.
In addition to taking pro-crypto enforcement and regulatory positions, the president and his family have plunged headfirst into making money in crypto.
A stablecoin launched by World Liberty Financial, a crypto project founded by Trump and sons Donald Jr. and Eric, received early support and credibility thanks to an investment fund in the United Arab Emirates using $2-billion worth of World Liberty’s stablecoin to purchase a stake in Binance. Stablecoins are a type of cryptocurrency typically tied to the value of the U.S. dollar.
A separate World Liberty Financial token saw a huge spike in price Thursday shortly after news of the pardon was made public, with gains that far outpaced any other major cryptocurrency, according to data from CoinMarketCap.
Zhao said earlier this year that his lawyers had requested a pardon.
It is not immediately clear what effect Trump’s pardon of Zhao may have for operations at Binance and Binance.US, a separate arm of the main exchange offering more limited trading options to U.S. residents.
Weissert and Suderman write for the Associated Press. Suderman reported from Richmond, Va.
July 18 (UPI) — President Donald Trump on Friday signed the GENIUS Act, which regulates dollar-based digital tokens called stablecoins and is the first major law governing digital currency.
On Thursday, the U.S. House voted 308-122 for the Guiding and Establishing National Innovation for U.S. Stablecoins Act. In June, the Senate passed the bill 68-30 with at least 60 votes needed for passage.
With congressional leaders and industry leaders in the White House’s East Room, he said: “This could be perhaps the greatest revolution of financial technology since the birth of the Internet itself.”
Trump has become a big ally of the crypto industry since his 2024 presidential campaign after calling it a “scam.”
Stablecoins are tied to tangible assets, such as the U.S. dollar, to make them more stable in comparison to other types of cryptocurrencies that derive their value from market demand.
Other digital cryptocurrencies, including Bitcoin, can experience significant price fluctuations and are not part of the Senate legislation.
Stablecoins must be fully backed by U.S. dollars or similar liquid assets, along with mandated annual audits for issuers with more than $50 billion in market capitalization and added language on foreign issuance.
Trump said “we take a giant step to cement the American dominance of global finance and crypto technology.”
He named David Sacks as his crypto and artificial intelligence czar early his in second presidency.
On March 6, Trump signed an executive order establishing the Strategic Bitcoin Reserve capitalized with Bitcoin that the U.S. Treasury seized through criminal and civil forfeiture.
A crypto market structure legislation has been delayed in the Senate. The House passed the Digital AssetMarket Clarity Act, for clarity and regulatory framework for digital assets.
Some Democrats were concerned about foreign issuers, anti-money laundering standards, potential corporate issuance of stablecoins and Trump’s deepening ties to crypto ventures.
Massachusetts Sen. Elizabeth Warren, who voted against the legislation, said: “Through his crypto business, Trump has created an efficient means to trade presidential favors like tariff exemptions, pardons and government appointments for hundreds of millions, perhaps billions of dollars from foreign governments, from billionaires and from large corporations. By passing the GENIUS Act, the Senate is not only about to bless this corruption, but to actively facilitate its expansion.”
His affiliated venture, World Liberty Financial, launched its stablecoin. Trump Media is planning to build a multi-billion-dollar Bitcoin treasury. And American Bitcoin, a mining firm backed by his sons, Eric Trump and Donald Trump Jr., is planning to go public via a Gryphon merger.
Trump and his wife, Melania, launched meme coins days before his inauguration on Jan. 20.
On May 22, Trump invited the top 220 holders of his $TRUMP meme to a private dinner at Trump National Golf Club in Sterling, Va.
As legislation to create a regulatory framework for stablecoins progresses in the US Congress, major banks are reportedly discussing issuing a joint stablecoin that could potentially provide commercial clients with various benefits.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act could become law this summer after taking a significant procedural step forward last month in the Senate. Meanwhile, industry participants are preparing. In April, The Wall Street Journal reported that several cryptocurrency firms, including Circle, a major stablecoin issuer and crypto-exchange operator, will seek bank charters. In late May, the newspaper broke news regarding plans by companies co-owned by JPMorgan Chase, Bank of America, Citigroup, and other large banks, including Early Warning Services and the Clearing House, to issue joint stablecoins.
The first Trump administration issued interpretive letters approving banks to offer crypto services, including holding reserves backing stablecoins.
Circle’s USDC stablecoin is widely used in crypto-institution finance, says David Easthope, head of fintech at Crisil Coalition Greenwich. In contrast, Tether’s USDT is favored by businesses preferring to transact in US dollars rather than volatile local currencies. Both USDC and USDT are tied to the dollar.
Ripple’s XRP has enabled cross-border payments for several years, but most still travel through a network of correspondent banks. Mike Johnson, EY Americas Financial Services Solutions leader for Digital Assets and Tax, says complex cross-border wire payments that currently take one to three days could be settled nearly instantly using stablecoins.
“Transactions costs could decrease from traditional $10-$50 wire fees to less than $0.01,” he says.
Johnson also notes that stablecoins could enable instant intercompany transfers and more agile liquidity management, adding, “Stablecoins could also offer faster, lower-cost options for cross-border payroll, contractor payouts, and remittances.”
However, according to Easthope, it remains unclear whether the advantages of a jointly issued bank stablecoin would draw companies away from those they may already be using or even from conventional technology integrated into their existing platforms.
“Banks would test and learn within the parameters of the GENIUS Act,” he adds, “and clients will vote with their stablecoins.”
If passed, the bill will establish for the first time a regulatory regime for stablecoins, a fast rising financial product.
The United States Senate has passed a bill to create a regulatory framework for US-dollar-pegged cryptocurrency tokens known as stablecoins, in a watershed moment for the digital asset industry.
The bill, dubbed the GENIUS Act, received bipartisan support on Tuesday, with several Democrats joining most Republicans to back the proposed federal rules. It passed 68-30. The House of Representatives, which is controlled by Republicans, needs to pass its version of the bill before it heads to President Donald Trump’s desk for approval.
Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg, are commonly used by crypto traders to move funds between tokens. Their use has grown rapidly in recent years, and proponents say that they could be used to send payments instantly.
If signed into law, the stablecoin bill would require tokens to be backed by liquid assets – such as US dollars and short-term Treasury bills – and for issuers to publicly disclose the composition of their reserves on a monthly basis.
“It is a major milestone,” said Andrew Olmem, a managing partner at law firm Mayer Brown and the former deputy director of the National Economic Council during Trump’s first term.
“It establishes, for the first time, a regulatory regime for stablecoins, a rapidly developing financial product and industry.”
The crypto industry has long pushed for lawmakers to pass legislation creating rules for digital assets, arguing that a clear framework could enable stablecoins to become more widely used. The sector spent more than $119m backing pro-crypto congressional candidates in last year’s elections and had tried to paint the issue as bipartisan.
The House passed a stablecoin bill last year but it died after the Senate, in which Democrats held the majority at the time, did not take it up.
Conflict of interest
Trump has sought to broadly overhaul US cryptocurrency policies after courting cash from the industry during his presidential campaign.
Bo Hines, who leads Trump’s Council of Advisers on Digital Assets, has said the White House wants a stablecoin bill passed before August.
Tensions on Capitol Hill over Trump’s various crypto ventures at one point threatened to derail the digital asset sector’s hope of legislation this year as Democrats have grown increasingly frustrated with Trump and his family members promoting their personal crypto projects.
“In advancing these bills, lawmakers forfeited their opportunity to confront Trump’s crypto grift – the largest, most flagrant corruption in presidential history,” said Bartlett Naylor, financial policy advocate for Public Citizen, a consumer rights advocacy group.
Trump’s crypto ventures include a meme coin called $TRUMP, launched in January, and a crypto company he partly owns, called World Liberty Financial.
The White House has said there are no conflicts of interest present for Trump and that his assets are in a trust managed by his children.
Other Democrats have expressed concern that the bill would not prevent Big Tech companies from issuing their own private stablecoins, and argued that legislation needed stronger anti-money laundering protections and prohibitions on foreign stablecoin issuers.
“A bill that turbocharges the stablecoin market, while facilitating the president’s corruption and undermining national security, financial stability and consumer protection is worse than no bill at all,” said Senator Elizabeth Warren, a Democrat, in remarks on the Senate floor in May.
The bill could face further changes in the House.
In a statement, the Conference of State Bank Supervisors called for “critical changes” to mitigate financial stability risks.
“CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors,” said president and CEO Brandon Milhorn in a statement.
June 11 (UPI) — The U.S. Senate overwhelmingly advanced legislation for a regulatory method for payment with stablecoins.
The cloture, which ended debate, was approved 68-30, including 18 Democrats. It clears the way for final approval for the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS. Two Republicans, Rand Paul of Kentucky and Josh Hawley of Missouri, voted no.
A stablecoin, which supporters say is a type of cryptocurrency designed to maintain a stable value, is typically pegged to another asset such as a currency such as a U.S. dollar or a commodity, including gold. Other digital cryptocurrencies, including Bitcoin, can experience significant price fluctuations and are not part of the Senate legislation.
For passage in the Senate, there needs to be at least 60 votes. On Tuesday, two House committees easily approved a bill that establishes a regulatory framework for digital assets, not just stablecoin, called the CLARITY Act.
“We want to bring cryptocurrency into the mainstream, and the GENIUS Act will help us do that,” said Senate Majority Leader John Thune of South Dakota, adding there was “more work to be done” for Congress in regard to digital assets, referring to the House’s bill.
The bill would require stablecoins to be fully backed by U.S. dollars or similar liquid assets, mandate annual audits for issuers with more than $50 billion in market capitalization and add language around foreign issuance.
The cloture ended an open amendments process. Democrats had sought to add a provision that would prevent President Donald Trump and other elected officials from profiting off stablecoins.
“Let me be clear, this did not happen by accident,” Senate Banking Committee Chair Tim Scott, R-S.C., said on the Senate floor before the vote. “It happened because we led. To those who said Washington could not act, to those who said Washington could not act, to those who doubted bipartisanship — let’s prove them wrong.”
Senate Minority Leader Chuck Schumer of New York voted against the bill along with other prominent Democrats.
“The GENIUS act attempts to set up some guardrails for buying and selling a type of cryptocurrency, one type called a stablecoin,” Sen. Jeff Merkley, D-Ore., said on the Senate floor before his no vote.
“Well, we need guardrails that ensure that government officials aren’t openly asking people to buy their coins in order to increase their personal profit or their family’s profit,” he added. “Where are those guardrails in this bill? They’re completely, totally absent.”
Some Democrats were concerned about foreign issuers, anti-money laundering standards, potential corporate issuance of stablecoins and Trump’s deepening ties to crypto ventures.
Trump and his wife, Melania, launched meme coins days before his inauguration on Jan. 20. His affiliated venture, World Liberty Financial, recently launched its stablecoin. Trump Media is planning to build a multi-billion dollar Bitcoin treasury. And American Bitcoin,a mining firm backed by his sons, Eric Trump and Donald Trump Jr., is planning to go public via a Gryphon merger.
“It’s extremely unhelpful that we have a president who’s involved in this industry, and I would love to ban this activity, but that does not diminish the excellent work of this legislation,” Sen. Kirsten Gillibrand, D-N.Y., who approved the measure, said.
“It does not diminish the hard work that bipartisan group of senators put into this to make a difference and to write a law that can protect consumers, that can protect our financial services industry, that can protect the strength of the dollar, and that can protect people who would like access to capital.”
Massachusetts Sen. Elizabeth Warren, who voted against cloture, said: “Through his crypto business, Trump has created an efficient means to trade presidential favors like tariff exemptions, pardons and government appointments for hundreds of millions, perhaps billions of dollars from foreign governments, from billionaires and from large corporations. By passing the GENIUS Act, the Senate is not only about to bless this corruption, but to actively facilitate its expansion.”
One problem that promoters of cryptocurrencies have faced since the asset class first emerged is that its reputation stinks.
Crypto trading has become identified by regulators and in the public mind as a haven for scams, theft and other forms of sharp practice. The FBI, in its most recent annual report on cryptocurrency, found that crypto-related fraud has exploded. Criminality is “pervasive” in the field, the agency warned.
The elusive use case for crypto assets seemed to have been narrowed down to facilitating criminal fraud, ransomware attacks, drug and human trafficking.
Trump’s cryptocurrency ventures are nothing more than a fig leaf for pay offs from foreign nationals.
— Sen. Richard Blumenthal (D-Conn.)
Then came Donald Trump. During the presidential campaign and after his election, crypto promoters thought they were entering the nirvana of officially recognized legitimacy.
Trump signaled that he would end government regulatory initiatives on crypto, “in order to promote United States leadership in digital assets and financial technology while protecting economic liberty,” to quote the executive order he issued Jan. 23, effectively wiping out federal regulations on the class.
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Things aren’t working out as they hoped. Since Trump returned to the presidency, his and his family’s involvement in crypto-related deals has critics charging that crypto has become an entirely new path for official corruption and conflicts of interest in the White House.
“Trump’s cryptocurrency ventures are nothing more than a fig leaf for payoffs from foreign nationals & foreign gov’ts,” Sen. Richard Blumenthal (D-Conn.) tweeted on May 7. Blumenthal’s target was the offer of a sit-down private dinner with Trump scheduled for May 22 at his Virginia golf club, and personal tours of the White House for the biggest buyers of $TRUMP, a “memecoin” assiduously promoted by Trump and his family.
The price of the coin soared to about $74 on Jan. 19, the day before Trump’s inauguration. It immediately fell in value, though its price has been propped up by the offer of the dinner and tours; the most recent quotes place it at about $13. The top 220 holders of the Trump coin, who are entitled to the dinner, spent nearly $148 million for the privilege, according to an estimate by Reuters.
More than half of the biggest holders appear to be foreign entities, according to an analysis by Bloomberg. That implies that the purchases might be designed to circumvent federal laws barring foreigners from making political contributions in the U.S.
Democratic Sens. Adam Schiff of California and Elizabeth Warren of Massachusetts demanded that the federal Office of Government Ethics, an independent executive branch agency, open an inquiry into the “severe risk that President Trump and other officials may be engaging in ‘pay to play’ corruption by selling presidential access to individuals or entities, to include foreign nationals and corporate actors with vested interests in federal action, while personally enriching the President and his family.”
DWF, a crypto firm based in the United Arab Emirates, announced last month that it had bought $25 million in coins issued by the Trump-affiliated firm World Liberty Financial, in part to “enhance regulatory engagement with U.S. policymakers.” Freight Technologies, a Houston logistics company, announced April 30 that it had borrowed $20 million to buy Trump coins, calling the transaction “an effective way to advocate for fair, balanced, and free trade between Mexico and the US.”
The unease has spread to Republicans on Capitol Hill, who fear that the Trumps’ crypto deals will undermine their efforts to enact crypto-friendly regulations.
“This gives me pause,” Sen. Cynthia Lummis (R-Wyo.), a leader in the legislative movement to pass a pro-crypto law, told NBC News. “Even what may appear to be ‘cringey’ with regard to meme coins, it’s legal, and what we need to do is have a regulatory framework that makes this more clear, so we don’t have this Wild West scenario.”
Trump’s activities already have derailed, if temporarily, the so-called GENIUS Act, which would regulate a form of cryptocurrency known as “stablecoins,” which are supposedly pegged to the value of underlying currencies such as dollars. Schiff and eight other Senate Democrats who had supported the measure have bailed on it, making passage in its current form virtually impossible.
Democrats in both chambers have introduced the “End Crypto Corruption Act,” which would bar the president, vice president, members of Congress and high-level executive branch appointees from issuing, sponsoring or endorsing any “cryptocurrency, meme coin, token, non-fungible token, stablecoin, or other digital asset that is sold for remuneration.”
Even some crypto promoters are no happier than the politicians. “They’re plumbing new depths of idiocy with the memecoin launch,” Nic Carter, a crypto investor and Trump supporter, told Politico.
As a crypto category, memecoins are disdained even by many participants in the field. They generally have even less utiilty or authenticity than mainstream cryptocurrencies, often originate as joke investments, and ride waves of pure hype. The Trump coin has no discernible value apart from its identification with Trump himself.
I asked the White House for comment on the accusations of corruption and received this reply from spokeswoman Karoline Leavitt: “President Trump is compliant with all conflict-of-interest rules, and only acts in the best interests of the American public.”
The memecoin isn’t Trump’s only venture into crypto, though some of his arrangements seem designed to give him plausible deniability if legal or ethics questions are raised. World Liberty Financial, which markets a crypto token designated $WLFI and a stablecoin designated USD1, is 60% owned by Trump and members of his family, who are entitled to up to 75% of the proceeds of sales of $WLFI.
The firm’s website features an image of Trump striking a heroic pose and says the WLFI token is “inspired by Donald J. Trump.” In the small print it asserts, however, that “any references to or quotes or imagery attributed to or associated with Donald J. Trump or his family members should not be construed as an endorsement or representation or warranty.”
Crypto investors really stepped up to the plate with political donations during the 2024 election cycle. Fairshake, the super PAC representing the class, spent nearly $41 million in contributions. That included $13 million to defeat two congressional candidates in Democratic primaries, Rep. Katie Porter (D-Irvine) and Rep. Jamaal Bowman (D-New York). Both were known to favor stricter regulation of the asset class, and both lost their races.
The biggest crypto firms spent lavishly in 2023 and 2024 to fatten Fairshake’s war chest, which collected more than $162 million in that time frame; Coinbase contributed $46.5 million, Ripple Labs, $45 million and Andreessen Horowitz, a major crypto investor, $44 million. Much of the total was funneled to two other crypto-related political action committees, according to federal election records.
After the election, many of the firms, like more traditional businesses, made contributions of $1 million or more to Trump’s inauguration fund.
One can hardly deny that the crypto camp has gotten its money’s worth from the Trump administration so far. The Securities and Exchange Commission has dropped or deferred more than a dozen enforcement cases against Ripple, Coinbase, Gemini, Kraken and other crypto promoters.
The largest victory arguably belongs to Coinbase, the biggest crypto trading platform in the U.S. The SEC in 2023 charged the firm with running an unlawful trading exchange and marketing unregistered securities. The case reflected the SEC’s position that what crypto firms are marketing are securities by a different name, and thus need to be registered as securities so buyers and sellers get the same legal protections as stock and bond investors.
Crenshaw noted that the deal was part and parcel of the SEC’s effective abandonment of crypto regulation. “This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public,” she wrote.
That won’t be the end of the deregulation drive. On April 7, Deputy Atty. Gen. Todd Blanche — who was Trump’s defense attorney in the New York criminal case that resulted in guilty verdicts on 34 felony counts of falsifying business records — ordered an end to Justice Department regulatory cases based on interpreting crypto assets as securities or commodities. That closed down the government’s principal regulatory initiative against crypto promoters.
Blanche directed the DOJ’s Market Integrity and Major Frauds Unit to “cease cryptocurrency enforcement,” and disbanded the National Cryptocurrency Enforcement Team, “effective immediately.”
There doesn’t seem to be any sign that Trump’s involvement with crypto will slow down even as he disembowels the government’s regulatory capacity over crypto ventures.
World Liberty Financial recently announced that Abu Dhabi would use its stablecoin to invest $2 billion in Binance, a multinational crypto firm that pleaded guilty and paid a $4.3-billion penalty in 2023 on charges of financial crimes including money laundering. Binance’s chief executive, Changpeng Zhao, also pleaded guilty and spent four months in U.S. prison.
On its investor advice webpage, the SEC used to post a warning on its website about crypto. “Trendy investments are especially ripe for fraudsters so be aware there is a real risk of fraud,” it said. “Cryptocurrencies may be today’s shiny, new opportunity but there are serious risks involved.”
