By pardoning Binance founder, Trump sends a clear message to white-collar criminals

A version of this story will appear in CNN Business’ Nightcap newsletter. To receive it in your inbox, sign up for free here.

new York
—

The Trump administration excels at sow uncertainty. But it sends an unambiguous message to crypto entrepreneurs who may be operating on the fringes or outside the law: don’t worry about anything.

ICYMI: President Donald Trump on Thursday granted another reprieve to a crypto tycoon who dramatically enriched the Trump family’s net worth.

Changpeng Zhao, founder and former CEO of crypto exchange Binance, served a four-month prison sentence after pleading guilty in 2023 to charges related to anti-money laundering violations. Zhao, widely known as “CZ,” was released in September 2024. After months of lobbying the Trump administration, he was granted a pardon, with the White House saying Thursday that it believes his case was “over-pursued” by the Biden administration.

The pardon is expected to help Binance return to the United States after a year-long investigation found the company allowed criminals to freely transact on its platform, enabling actions such as child sexual abuse, drug trafficking and terrorism financing. (The company and Zhao pleaded guilty in one of the largest corporate settlements with federal authorities in U.S. history.)

Zhao’s case was a major victory for the Biden administration, coming just weeks after a jury ruled Sam Bankman-Fried guilty multiple counts of fraud and conspiracy in connection with the collapse of his company, FTX, a former rival of Binance. (Bankman-Fried, sentenced to 25 years in federal prison, also seeks forgivenessaccording to the New York Times.)

At that time, prosecutors and financial regulators had a frosty stance toward crypto that the industry has long characterized as hostile — a fact that helped galvanize crypto advocates to support Trump, who supported them (and their very wealthy donors) during his re-election campaign.

Trump, once a skeptic of digital assets, is now a crypto mogul in his own right. Having accumulated more than $5 billion in paper earnings from his own and his family’s crypto ventures, Trump’s digital asset portfolio now dwarfs his real estate holdings.

But Trump’s success in crypto is due in large part to the connections he and his older sons have made with industry bigwigs, including Zhao, whose net worth is estimated at more than $85 billion.

The Trump family’s crypto platform, World Liberty Financial, is hosted by Binance, and the exchange has been a key driver in the growth of World Liberty’s dollar-pegged token, USD1. Earlier this year, while Zhao was actively seeking pardon, Binance accepted a $2 billion investment from a UAE-backed investment firm using $1 — a boon for World Liberty Financialwho actually received a bank deposit of $2 billion.

Democrats and even some republicans THURSDAY called Zhao’s pardon inappropriate, given the close ties between Binance, Zhao and the Trump family business.

“This is just the latest example of Trump’s pardon payment scheme,” former Labor Secretary and prominent Trump critic Robert Reich wrote on X.

Of course, Zhao isn’t the only crypto mogul to discover that investing money in Trump’s crypto projects tends to make the worrisome fees go away.

Justin Sun, the Chinese crypto-billionaire who invested tens of millions of dollars in World Liberty Financial shortly after its launch, had faced civil fraud charges in the United States under the Biden administration. The Securities and Exchange Commission dropped case against Sun in February.

Sun, who would have avoided setting foot on American soil for fear of being arrested, was a VIP guest at Trump’s private crypto dinner in May — an event for which guests competed for invitations by purchasing the president’s memecoin.

Other white-collar defendants Trump has pardoned include Ross Ulbricht, a famous cause of the crypto libertarian worldwho was serving a life sentence for creating the Silk Road marketplace, which the Justice Department described as “the most sophisticated and expansive criminal marketplace on the Internet.”

Trump also pardoned Trevor Milton, founder of bankrupt electric vehicle startup Nikola, who was sentenced to four years in prison for exaggerating the potential of his technology. Milton and his wife notably donated more than $1.8 million to a Trump re-election campaign fund, according to public records.

Trump’s full embrace of crypto has been a welcome change for investors who have been trying to usher in digital assets into the mainstream of finance. At the same time, many advocates have expressed concern that some of his decisions – including Ulbricht’s pardon – reinforce crypto’s long association with fraud.

“I love President Trump; he’s probably the best administrator I’ve ever had – except for these pardons,” wrote tech entrepreneur Joe Lonsdale. on. “POTUS has been terribly advised on this; it makes it look like there is massive fraud going on around him in this area.”

While news of CZ’s pardon sent a Binance-linked token soaring, the broader crypto market was relatively quiet.

The White House has consistently chafed at any suggestion of impropriety or unethical behavior surrounding Trump’s apparent pay-to-play strategies.

And Trump – who is no stranger to being the target of a white-collar criminal prosecution – defended his decision to pardon Zhao.

“Let me just tell you, he was someone who, as I was told, I don’t know him, I don’t think I ever met him…he had a lot of support, and they said what he did wasn’t even a crime,” Trump told CNN’s Kaitlan Collins during a panel discussion in the State Dining Room of the White House on Thursday. “It was not a crime that he was persecuted by the Biden administration, which is why I granted him clemency at the request of many very good people.”