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Binance’s Role in Trump Family Crypto Venture
Recent reports indicate that cryptocurrency exchange Binance played a significant role in assisting a venture linked to the Trump family in generating billions, just prior to Donald Trump’s pardon of its co-founder, Changpeng Zhao. Zhao, also known as “CZ,” received the pardon after the Trump administration claimed he was targeted by the Biden Administration’s efforts against the cryptocurrency sector. In 2023, Zhao had admitted guilt to charges related to money laundering, agreeing to step down from his position at Binance as part of a substantial $4.3 billion settlement with the Justice Department, which resulted in a four-month prison sentence.
Binance’s Strategic Moves Post-Pardon
Following Trump’s victory in the 2024 election, Zhao’s company identified an opportunity for a resurgence. Binance formed a specialized task force aimed at negotiating a partnership with World Liberty Financial, a cryptocurrency project associated with the Trump family. This effort included a prolonged campaign for clemency, as reported by the Wall Street Journal, citing sources familiar with the negotiations.
Trump Family’s Financial Stake in World Liberty
The Trump family, through an umbrella entity, holds a majority stake in World Liberty Financial. The company’s latest stablecoin, designed to maintain parity with the U.S. dollar, experienced a dramatic surge in value, skyrocketing from $127 million to over $2.1 billion this spring, following Binance’s involvement. The underlying technology for this stablecoin, known as USD1, was developed by Binance. Shortly after its launch in March, an Emirati state-backed fund, MGX, reportedly invested $2 billion in Zhao’s company, which positioned World Liberty to potentially earn tens of millions in interest.
Denials from World Liberty and Binance
World Liberty has stated that Binance was not part of the investment agreement with MGX, and Binance’s attorney clarified that Zhao did not facilitate the relationship between MGX and the Trump family’s venture. With Zhao’s pardon now secured, it appears Binance may be poised for a significant return to the U.S. market after facing a ban in 2023. World Liberty has asserted that discussions regarding the pardon were never part of their interactions. The company’s legal representative noted that they supported Zhao’s pardon, emphasizing that individuals victimized by what they term “lawfare” deserve clemency.
Reactions to the Pardon
In light of the pardon, Trump remarked that it was granted “at the request of a lot of very good people,” although some within his administration expressed concern over the decision’s implications, according to the Wall Street Journal. White House press secretary Karoline Leavitt reiterated that neither Trump nor his family has engaged in any conflicts of interest. Zhao was released from incarceration in September, and following Trump’s electoral success, he and Binance co-founder Yi He, who is also Zhao’s partner, mingled with notable figures, some connected to Trump.
Networking Events and Legal Challenges
During a visit to Abu Dhabi, Zhao and his partner hosted various guests, including Errol Musk, father of Elon Musk, and individuals associated with World Liberty. Reports also indicate that Zhao interacted with key Trump associates at a bitcoin conference, although both World Liberty and a Trump administration official have denied any formal meetings took place at that event. In April, Zhao met with representatives affiliated with MGX and World Liberty at a beachfront venue, continuing discussions that could influence the future of these cryptocurrency ventures.
Legal Consequences and Criticism
Zhao’s guilty plea stemmed from a broader investigation into Binance for failing to adhere to the Bank Secrecy Act and other regulatory obligations, which allegedly allowed illicit activities to occur on its platform. Following his admission of guilt, he resigned from his position. Critics, including Democratic Senator Elizabeth Warren, condemned Trump’s pardon, arguing that it undermines justice and promotes corruption. Other prominent figures, even among Trump’s supporters, also expressed disapproval of the pardon, with some suggesting that it could create a perception of widespread fraud.
Binance’s Defense and Future Prospects
Representatives from Binance have contended that Zhao’s actions would not have been prosecutable during the Trump administration, highlighting the shifting regulatory landscape for cryptocurrencies.
