White House Considers Pardon for Crypto Tycoon Changpeng Zhao
The Biden administration is ramping up discussions about potentially pardoning prominent cryptocurrency figure Changpeng “CZ” Zhao, which has ignited a significant debate among government officials. This conversation comes in light of recent cryptocurrency transactions involving President Trump’s family.
Zhao, the 48-year-old founder of the major cryptocurrency exchange Binance, was sentenced to four months in prison in the U.S. last year. He made headlines back in May when he revealed that he had requested a pardon from President Trump following his guilty plea for violating the Bank Secrecy Act and for inadequate anti-money laundering measures while he was CEO of Binance.
On Friday, news broke, revealing that the discussions in the White House about a pardon have heated up; Zhao continues to hold the title of largest shareholder in Binance. His return to the company could be on the horizon.
“If true, great news,” Zhao remarked, adding a few prayer hand emojis to express his enthusiasm.
Some sources close to the President suggest that the case against Zhao is relatively weak, raising questions about whether it justifies a substantial prison term. While it’s uncertain where the President currently stands on the issue of pardons, those familiar with the discussions indicate that he may be sympathetic to Zhao’s situation. Actually, a number of players in the $4.2 trillion cryptocurrency sector feel that Zhao has been unfairly targeted by the Biden administration’s broader crackdown on cryptocurrencies.
To settle the charges against it, Binance paid a hefty $4.3 billion fine and implemented stricter rules designed to prevent misuse of its platform. In a related move, Zhao consented to a $50 million penalty and stepped down as CEO.
Zhao is keen to clear his name, which would also lift a barrier that hinders highly regulated investment firms from collaborating with those who have felony convictions. Moreover, Binance could also benefit by overturning business restrictions imposed in the state where Zhao was found guilty.
However, Zhao’s situation is complicated by the growing business interests in cryptocurrencies among Trump and his family, including a partnership with Binance and ties to Zhao himself. Some Democratic lawmakers, particularly Connecticut Senator Richard Blumenthal, are voicing objections to a potential pardon due to the family’s ongoing crypto business involvements.
According to an insider, there are concerns in the White House regarding the political optics and implications that could arise if President Trump decides to pardon someone as significant in the cryptocurrency world as Zhao.
A request for comment from the White House press secretary went unanswered, and Zhao’s attorney, Tercy Goody Gillen, who is reportedly spearheading the pardon campaign, also did not respond to inquiries. Gillen, a former SEC lawyer and a partner at Baker Hostetler, has a background in cryptocurrencies.
Eleanor Tellet, the editor of the influential newsletter Crypto in America, pointed out that many high-profile members of the crypto community, including some connected to Trump, believe that the harsh charges against Zhao stemmed from the fallout of the FTX exchange’s collapse.
The infamous Sam Bankman-Fried, known as SBF, is currently serving a 25-year prison sentence for misappropriating FTX customer funds to support his extravagant lifestyle and illicit trading operations. Notably, his activities were largely overlooked during the early Biden-era crackdown on cryptocurrencies, even though he was a significant contributor to Democratic efforts, including that of the former President.
“CZ hasn’t faced fraud charges like SBF, and many people in the industry regard his prison term as a consequence of regulators trying to cover their embarrassment following the FTX fiasco,” Terret commented.
