The White House is intensifying discussions concerning a potential pardon for prominent cryptocurrency entrepreneur Changpeng “CZ” Zhao, igniting a vigorous debate within the administration regarding the public perception, especially as Trump’s family engages in multiple cryptocurrency transactions, sources say.
Zhao, the 48-year-old founder of Binance, one of the largest cryptocurrency exchanges, who previously spent four months incarcerated in the U.S., revealed in May that he submitted a pardon request to President Trump related to his guilty plea for violating the Bank Secrecy Act and inadequately maintaining anti-money laundering protocols during his time as CEO.
On Friday, a report by this journalist disclosed on X that White House conversations regarding the potential pardon have escalated lately, which might pave the way for CZ’s return to Binance, as he is still the biggest shareholder in the company.
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“Great news if true,” CZ responded, alongside four praying-hands emojis.
Some sources within the president’s circles believe that the charges against Zhao were relatively flimsy, not warranting a felony charge or jail time. While the president’s stance on a pardon remains uncertain, insiders convey that he shows understanding towards Zhao’s situation. Many stakeholders in the $4.2 trillion cryptocurrency sector perceive Zhao as unfairly targeted in a broad crackdown by the Biden administration in 2023, framing it as excessive.
To address the accusations, Binance incurred a fine of $4.3 billion and implemented new measures to deter illicit activities on its platform. Concurrently, Zhao paid $50 million in penalties and agreed to step down as CEO of Binance.
Zhao has been vocal about his aspiration for a pardon, as it would also eliminate a tarnish on his record that hinders collaborations with heavily regulated investment entities. Furthermore, Binance’s U.S. branch could potentially benefit from alleviating state restrictions on its operations.
The situation is complicated for Zhao due to the Trump family’s expanding business interests in cryptocurrency, particularly their ties with Binance and Zhao himself. Democratic politicians, including Connecticut Senator Richard Blumenthal, have raised concerns regarding a potential pardon, given Trump’s family’s cryptocurrency involvement, sources state.
“Individuals within the White House express concerns over the optics and potential political consequences tied to Trump granting a pardon to such a pivotal figure in the cryptocurrency realm,” shared one individual familiar with the discussions.
A spokesperson from the White House did not respond to requests for comment. Zhao’s attorney, Tersea Goody Guillen, who is reportedly spearheading the lobbying for the pardon, also did not respond to queries from the press. Goody Guillen, a former staff attorney at the SEC with a focus on cryptocurrency law, is a partner at Baker Hostetler law firm.
Eleanor Terrett, editor of the prominent Crypto In America newsletter, noted that numerous high-profile crypto executives, including those with connections to Trump’s White House, believe the severity of the charges against Zhao and his imprisonment stem in part from the fallout surrounding the collapse of Sam Bankman-Fried’s FTX.
Bankman-Fried, commonly known as SBF, is currently serving a 25-year sentence for fraud and the misuse of FTX customer assets for personal expenses and a trading operation. His actions went largely overlooked during the initial phases of the Biden administration’s crackdown on the crypto industry, even as he became a significant donor to Democratic campaigns, including those of the former president.
“Unlike SBF, CZ wasn’t charged with fraud, and many industry insiders view his sentence as a consequence of regulators, still grappling with their own embarrassment post-FTX, making an example of anyone involved in crypto within or around the U.S.,” Terrett stated.
