2 hours ago
1
The White House has ramped up talks for a possible pardon of the high profile crypto tycoon Changpeng “CZ” Zhao – sparking a fierce debate inside the administration about optics as Trump’s family cuts a flurry of crypto deals, The Post has learned.
The 48-year-old founder of the giant crypto exchange Binance – who spent four months in US prison last year – said in May he petitioned President Trump for a pardon of his guilty plea over a single count of violating the Bank Secrecy Act and failing to maintain proper anti-money laundering controls when he was Binance’s CEO.
On Friday, this reporter broke the news on X that discussions inside the White House have recently heated up on the possibility of a Trump pardon, which could set the stage for CZ’s return to Binance, since he remains the company’s largest shareholder.
Changpeng “CZ” Zhao, who spent four months in US prison last year, has said he petitioned President Trump for a pardon. Getty Images
“Great news if true,” CZ wrote in response, adding four praying-hands emojis.
Some insiders close to the president believe the case against CZ was pretty weak – not something that merited a felony charge and jail time. It’s unclear where the president stands on a pardon, though people close to the matter say he’s sympathetic to Zhao’s cause. Indeed, many players in the $4.2 trillion crypto industry believe CZ was unfairly caught up in a wide-ranging crypto crackdown in 2023 by the Biden administration that amounted to legal overkill.
To settle charges, Binance paid a $4.3 billion fine and adopted new rules to prevent bad actors from using its platform to finance their operations. Zhao, meanwhile, paid $50 million in fines and agreed to resign as CEO of Binance.
For his part, Zhao has been outspoken about his desire for a pardon, which also would erase a black mark on his resume that prevents highly regulated investment firms from doing business with convicted felons. Binance also could profit by possibly reversing state bans on its business that followed Zhao’s conviction.
Complicating matters for Zhao, however, is the president’s and his family’s growing business interests in crypto – some of which include partnerships with Binance, and even with Zhao himself. Democrats like Connecticut Sen. Richard Blumenthal have taken issue with the possible pardon in the context of the Trump family’s crypto business dealings, sources said.
President Trump’s family business interests in crypto include partnerships with Binance and Zhao. REUTERS“There are people in the White House who are worried about the optics and political fallout if Trump pardons someone as important as CZ to the crypto business,” said one person with knowledge of the White House deliberations.
A White House spokesman didn’t return a request for comment. Zhao’s attorney Tersea Goody Guillen, who is said to be leading the lobbying push for a pardon, didn’t return a call and email request for comment. Goody Guillen, a former SEC staff attorney with experience in crypto, is a partner at the firm Baker Hostetler.
Eleanor Terrett, editor of the widely-read Crypto In America newsletter, says many top crypto executives, including those with ties to the Trump White House, believe that the harshness of the charges against Zhao and the jail time were a result of the collapse of Sam Bankman-Fried’s FTX exchange.
Bankman-Fried, known as SBF, is serving a 25-year sentence for fraud and misusing FTX customer funds to finance his lavish lifestyle and side hustle of a trading operation. His activities went unnoticed during the first part of the Biden administration’s crypto crackdowns – even as SBF emerged as a major donor to Democratic politicians including the former president.
“CZ wasn’t accused of fraud like SBF and many industry players see his jail sentence as the result of regulators – still with egg on their faces, post-FTX – making an example out of anyone in crypto who operated in or around the US,” Terrett said.
English (US)