Donald Trump pardons Binance crypto founder Changpeng Zhao

Changpeng Zhao, the co-founder of cryptocurrency exchange Binance who pleaded guilty to criminal charges relating to lax money laundering controls, has been pardoned by Donald Trump.

“President Trump exercised his constitutional authority by issuing a pardon for Mr Zhao, who was prosecuted by the Biden administration in their war on cryptocurrency,” said White House press secretary Karoline Leavitt.

“The Biden administration pursued Mr Zhao despite no allegations of fraud or identifiable victims,” she added. “The Biden administration’s war on crypto is over.”

Zhao, known as CZ, joins a growing list of crypto executives the president has pardoned, including Silk Road creator Ross Ulbricht and employees of the BitMex crypto exchange. BitMex co-founder Arthur Hayes on Thursday tagged Zhao in an X post welcoming him “to the club”.

In 2023, Zhao pleaded guilty to a criminal charge of failing to protect against money laundering, while Binance pleaded guilty to a breach of international financial sanctions and anti-money laundering regulations. The exchange agreed to pay about $4.3bn (€3.7 billion) in penalties — the largest settlement of its kind with US authorities.

US regulators claimed Binance failed to stop sanctions evasion and transactions linked to criminals, hackers and terrorist groups including al-Qaeda and Isis.

US prosecutors sought a three-year prison term for Zhao, who was eventually sentenced to four months in 2024 and finished his term later that year.

Zhao said on X that he was “deeply grateful for today’s pardon and to President Trump for upholding America’s commitment to fairness, innovation and justice”.

Binance, founded by Zhao in 2017, for years operated largely offshore and refused to name a headquarters, clashing with regulators in dozens of countries over anti-money laundering controls and consumer protection rules around risky crypto trading.

It has grown to become the world’s largest crypto exchange, propelling Zhao’s net worth to about $54bn, according to Bloomberg’s Billionaires Index.

Zhao’s pardon could clear the way to lifting limitations on his travel to the US and involvement in US securities markets that were imposed as part of his deals with the Department of Justice and a tandem case by US securities regulators.

Trump has embraced cryptocurrencies during his second term in the White House. The administration has overhauled the US’s regulatory stance, while the president’s family have launched crypto businesses.

Earlier this year, Binance received a $2bn investment from Abu Dhabi fund MGX that was paid entirely with a stablecoin, USD1, issued by World Liberty Financial, a crypto company controlled by Trump’s family.

The Abu Dhabi group said it chose to use USD1 based on factors including its “compliance history.”

Zhao’s investment firm YZi Labs is one of the biggest crypto funds in the world and has in recent months ploughed millions of dollars into a small Nasdaq-listed stock that buys and hoards Binance’s BNB token. The price of the token jumped as much as 8% on Thursday following his pardon.

Zhao’s pardon follows US regulators’ decision in February to pause a fraud investigation into several companies run by crypto billionaire Justin Sun, who controls the digital asset platform Tron. In May, Sun and the other 24 top holders of the $Trump memecoin attended a banquet with the president at the Trump National Golf Club in Virginia.

Trump companies have made more than $1bn in pre-tax profits from crypto ventures over the past year, the Financial Times reported this month.

Eswar Prasad, a Cornell University professor and Brookings Institution senior fellow, said: “It is clear that the connections between the Trump administration and the crypto industry run deep, and that the US government machinery will be openly deployed to support this industry.”