Changpeng Zhao, one of the wealthiest and most influential figures in the cryptocurrency industry, is back in the spotlight this week after securing a pardon from President Donald Trump — a reprieve that renews concerns that those with deep pockets have been able to buy their way out of trouble under Trump 2.0.
It is hard to overstate how much Zhao, who goes by “CZ,” has shaped the crypto industry since he launched Binance in 2017 and grew it into the world’s largest trading platform for digital assets.
Put simply: If you want to take, say, $100 from your bank account and use it to buy or sell cryptocurrencies virtually anywhere in the world, Binance facilitates that process, and takes a small fee off of every trade. It also offers more complex financial services like margin trading and “staking,” a way for investors to earn passive returns on their crypto holdings.
Not only is Binance by far the world’s biggest crypto exchange, as measured by both user count (280 million globally) and trading volume (more than $217 billion daily), it boasts 40% of the market share among centralized crypto exchanges.
But Binance hasn’t always complied with rules governing the sale of financial services in various jurisdictions, including in the US, which effectively banned the global version of the platform in 2019. (In response, Binance launched a more limited service, Binance.US, though in practice many users within US borders found ways around the ban, according to media reports and the Department of Justice.)
US federal prosecutors said in a 2023 that Binance had become a hub for bad actors, enabling transactions linked to child sex abuse, narcotics, terrorist financing and money laundering. Binance also lacked protocols — standard for financial services companies — to report transactions for money laundering risks, according to the Justice Department, and employees were well aware that such an oversight would invite criminals to the platform. One compliance staffer wrote, according to court documents: “we need a banner ‘is washing drug money too hard these days - come to binance we got cake for you.’”
The company and Zhao pleaded guilty in the United States to money-laundering violations. As part of a settlement with the government, Zhao stepped down as CEO, paid a $50 million fine, and served a four-month sentence in federal prison. Zhao still owns an estimated 90% of the company, giving him an estimated net worth of more than $80 billion, according to Forbes.
Zhao remains synonymous with Binance, and he retained his industry clout even after he went to prison. On Friday, Zhao, a Chinese-born Canadian national who now lives in the United Arab Emirates, reflected on his recent ups and downs, stating: “My official record was tarnished for a bit, but my reputation held strong. No one, not a single person, stopped doing business with me.”
Why does it matter?
For years, crypto in the United States was a largely theoretical project — a parallel financial system led by a community of extremely online pioneers, who believed the future of money lay in computer networks outside the control of governments or central banks.
But 16 years in, crypto has ballooned to a $3.5 trillion industry with growing exposure to mainstream finance, due in part to Trump’s evolution from skeptic to full-fledged crypto mogul. Just this week, Federal Reserve Board Governor Christopher Waller said crypto assets “are no longer on the fringes” and “increasingly are woven into the fabric of the payment and financial systems” — a stunning acknowledgement for an industry that nearly imploded just three years ago with the collapse of FTX, Sam Bankman-Fried’s once high-flying competitor to Binance.
Institutional interest in crypto has shot up with the introduction of Bitcoin ETFs, and Congress recently passed an industry-approved regulatory bill that proponents hope will increase adoption. There’s a long way to go, however, as most Americans (63%) have little or no confidence in crypto as a safe investment, according to Pew Research.
Crypto proponents also embraced Trump’s re-election — the industry became the biggest corporate donor in the 2024 general election — and Trump embraced crypto right back.
Trump took to crypto with the zeal of the converted, promising to make the United States the “crypto capital” of the world, and even embracing fringe elements that made many advocates uneasy — like launching his own memecoin, a kind of souvenir token closely associated with scams, pardoning the notorious founder of the criminal Silk Road marketplace, and calling for the establishment of a national strategic bitcoin reserve, which would enrich early adopters while undermining the anti-establishment ethos of crypto’s founding.
The Trump family’s vast crypto empire is perhaps the most problematic of the president’s conflicts of interest, making earlier ethics debates over his hotel and casino business interests look downright quaint. There is virtually no cap on how much money can flow to the Trump family via crypto.
The Trumps and Binance
The president’s pardon of Zhao exemplifies those ethical concerns because Binance has direct financial ties to the Trump family’s crypto business.
In March, the Trump family’s World Liberty Financial launched a dollar-pegged token known as a stablecoin — popular assets in crypto because their value remains constant, while most other token prices are prone to volatility.
According to Bloomberg, Binance wrote the basic code to power World Liberty’s stablecoin, USD1, and has promoted the coin to its 280 million users around the globe.
Shortly after the coin launched this spring, a UAE-based firm announced it would use USD1 to take a $2 billion stake in Binance — using USD1, a deal that is expected to generate millions in returns for World Liberty, which is controlled jointly by the Trumps and the family of Steve Witkoff, Trump’s Mideast negotiator.