The Best Presidential Pardon a Stablecoin Can Buy

Trump pardons Binance founder Changpeng Zhao. Was it a quid pro quo?

Illustration by Daniel Medina

Presidential pardons are almost always controversial. Sometimes they are shrouded in mystery, like President Gerald Ford’s 1974 pardon of Richard Nixon. Was the pardon pre-arranged when Nixon appointed Ford as his vice president in late 1973, or did Ford grant it less than a year later to move on from a scandal that had consumed the nation?

Sometimes pardons appear to be transactional, such as Bill Clinton’s 2001 pardon of Marc Rich, the powerful and secretive slime-ball founder of commodity trading giant Glencore. Rich fled to Switzerland in 1983 shortly before his indictment on charges of fraud, racketeering and tax evasion. Clinton pardoned Rich in the last days of his administration after lobbying from his ex-wife, who happened to give more than $1 million to the Democratic Party and $450,000 to Clinton’s presidential library.

Add President Trump’s pardon of Changepeng Zhao to the “appears transactional” column. Zhao, or CZ as he’s known, is the founder of Binance, the world’s largest cryptocurrency exchange. He served four months in federal prison after pleading guilty in 2023 to failing to maintain an effective anti-money laundering program.

As we reported last month, the Trump family’s World Liberty Financial (WLF) scored a huge coup when its stablecoin, USD1, was used by MGX — an Abu Dhabi state-backed company — to purchase a stake in Binance for $2 billion. The use of USD1 in a major transaction not only lent legitimacy to the coin but also brought $2 billion to WLF, enabling the company to earn interest.

Incredibly, Trump told 60 Minutes, “I don’t know who he is” and, in regard to his family’s financial connection to Binance, “I know nothing about it.”

While not quite up there with, “I did not have sexual relations with that woman,” it’s still some top-shelf presidential bullshit.

What did CZ and Binance do to earn that 2023 conviction?

CZ and Binance pled guilty to violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).

Treasury Secretary Janet Yellen stated:

Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform. Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.

Binance raked in fees through illegal transactions involving users in Iran, Cuba, Syria, and Russian-occupied Ukraine.

The plea deal announcement was damning, highlighting a company and its founder openly flaunting their indifference to aiding and abetting narco and terrorist finance. In fact, a Binance employee was quoted as saying, “We need a banner, ‘is washing drug money too hard these days - come to Binance, we got cake for you.’” CZ is also quoted as telling employees, “Better to ask for forgiveness than permission.”

As part of their plea agreement, Binance paid $4.3 billion in penalties. CZ also had to resign as CEO, but he remains the company’s largest shareholder.

He was released from prison in September 2024 and, lucky for him, the man WLF had described as its “Chief Crypto Advocate” was on his way to winning the presidency again.

Trump pardoned CZ just five months after the MGX-Binance transaction involving his family’s WLF.

Last week the Wall Street Journal brought to light something that I’d argue is even worse than the stinky MGX-Binance transaction.

Binance built the stablecoin for WLF!

From the WSJ report:

It (Binance) committed a team including its Hong Kong-based stablecoin chief to build the blockchain technology for USD1, people familiar with the project said.

(Gail) Gitcho, the World Liberty spokeswoman, said Binance provided World Liberty with so-called smart contracts, which govern how a stablecoin operates on the blockchain, “to save WLFI the headache of reproducing them, but not in exchange for anything.”

Saying that with a straight face must have been difficult. Not to be outdone by Gitcho’s bullshit, White House Press Secretary Karoline Leavitt took to the lectern!

“The president is exercising his constitutional authority to grant clemency requests. And the president and the White House have a very thorough examination of every pardon request that comes to the president’s desk,” she said, adding the case was “over-prosecuted.”

The “examination” is so thorough that Trump claims not to even know who CZ is.

Leavitt also stated that, “Even the judge in the case admitted that the Biden Administration was pursuing an egregious over-sentencing of this individual.”

The judge never said or “admitted” that.

U.S. District Court Judge Richard Jones told CZ that there were a number of mitigating factors in his four-month sentence, including his cooperation with law enforcement. Jones also cited numerous letters the court had received that testified to Zhao’s character, and stated that he did not believe Zhao was likely to reoffend.

While Jones did say that the 36-month sentence the government was seeking was unjustified, he also said that the specific violation of the federal Bank Secrecy Act was “unprecedented in terms of the volume, scale and massiveness,” and that Binance “essentially turned a blind eye” to potential terrorism financing and drug trafficking:

You have to understand that despite wealth, power, or status, no person, regardless of wealth, is immune from prosecution or above the laws of the United States. You prioritized Binance’s growth and profits over compliance with United States laws and regulations.

Hilariously, Leavitt also said in a written statement that there were “no identifiable victims” in CZ’s case.

If you are moving money that aids and abets terrorists and drug cartels, there’s probably a long list of “identifiable victims.”

In a perverse way, maybe she has a point on the egregious over-sentencing. After all, in 2012, global banking powerhouse HSBC reached a plea deal with the Obama Administration DOJ for its far-ranging money laundering operation for Mexican drug cartels. HSBC paid a $1.29 billion fine and nobody went to jail. If HSBC is the bar, then maybe four months in jail and a $4 billion payment is egregious? Or maybe there should be a few HSBC executives in prison playing dominoes with El Chapo.

This whole thing reminds me of the hilarious Dave Chappelle SNL opening monologue in 2022.

“Nobody had ever seen somebody come from inside of that house, outside and tell all the commoners, ‘We are doing everything you think we are doing inside of that house.’ And then he went right back in the house and started playing the game again!”