WASHINGTON – President Donald Trump has pardoned Binance founder Chao Changpeng, who served time in prison for creating the world’s largest cryptocurrency exchange and failing to prevent criminals from using the platform to transfer funds related to child sexual abuse, drug trafficking and terrorism.
The pardon concludes a month-long effort by Zhao, a billionaire and one of the industry’s biggest names, commonly known in the crypto world as CZ. He and Binance were major backers of some of the Trump family’s crypto companies.
“I am deeply grateful to President Trump for today’s pardon and for upholding America’s commitment to equity, innovation, and justice,” Zhao said on social media Thursday.
Mr. Zhao’s pardon is the latest step by the president to use executive authority to pardon political allies, prominent public figures and others convicted of crimes.
White House press secretary Caroline Levitt said in a statement Thursday that Democratic President Joe Biden’s administration prosecuted Mr. Zhao out of a “desire to punish the crypto industry” and insisted there were “no allegations of fraud or identifiable victims.”
The crypto industry has long complained that it has been subjected to an “executive regulation” mentality under the Biden administration. President Trump’s pardon of Mr. Zhao fits into a broader pattern of Mr. Zhao taking a hands-off approach to the industry he spent billions on to help win the 2024 election. The Trump administration has reversed several enforcement actions against crypto companies initiated during Biden’s term and disbanded the Justice Department’s crypto enforcement team.
Former federal prosecutor Mark Bini said Mr. Zhao went to prison for “violations of regulations, at worst charges like kissing your cousin.”
“So this pardon, even though it involves some of the biggest players in the crypto industry, is not all that surprising,” said Bini, a white-collar cryptocurrency attorney at Reed Smith.
Mr. Zhao was released last year after being sentenced to four months in prison for violating the Bank Secrecy Act. He is the first person to be sentenced to prison for violations of the law, which requires U.S. financial institutions to know their customers, monitor transactions and report suspicious activity. Prosecutors said no one violated the regulations more than Mr. Zhao.
The judge in the case said he was troubled by Mr. Zhao’s decision to ignore U.S. banking requirements that would have slowed the company’s explosive growth.
Prosecutors said Mr. Zhao told employees that it was “better to ask for forgiveness than permission” regarding the company’s approach to U.S. law. According to prosecutors, Binance authorized more than 1.5 million crypto transactions totaling nearly $900 million in violation of U.S. sanctions, including transactions involving Hamas’ al-Qassam Brigades, al-Qaeda, and Iran.
“I failed here,” Zhao told the court during his sentencing hearing last year. “I deeply regret my mistake and am sorry.”
Mr. Zhao has taken an amazing path to becoming a crypto billionaire. He grew up in rural China and immigrated to Canada with his family after the 1989 Tiananmen Square massacre. He worked at McDonald’s as a teenager and fell in love with the technology industry in college. He founded Binance in 2017.
In addition to taking a stand in favor of crypto enforcement and regulation, the president and his family have been among the first to make money with cryptocurrencies.
The stablecoin launched by World Liberty Financial, a cryptocurrency project founded by Trump and his sons Donald Jr. and Eric, received early support and confidence thanks to a United Arab Emirates investment fund that used $2 billion worth of World Liberty stablecoins to buy Binance stock. A stablecoin is a type of cryptocurrency that is usually tied to the value of the US dollar.
Another World Liberty Finance token spiked in price significantly on Thursday, shortly after news of the pardon became public, outpacing other major cryptocurrencies by far, according to data from CoinMarketCap.
Mr. Zhao said earlier this year that his lawyer had asked for clemency.
It was not immediately clear how President Trump’s pardon of Zhao might affect the operations of Binance and Binance.US, a separate arm of the main exchange that offers more limited trading options to U.S. residents.
Suderman reported from Richmond, Virginia.
