Trump’s Surprising Path to a Binance Founder Pardon

Reports suggest that President Trump is contemplating a pardon for Binance founder CZ, with sources indicating that the administration views the case as weak. Charles Gasparino of the New York Post has indicated that Trump’s insiders believe CZ’s charges did not warrant such severe legal consequences.

Changpeng Zhao’s Legal Challenges

In 2023, Zhao accepted a plea deal involving a single violation of the Banking Secrecy Act, resulting in a $50 million fine and a four-month prison sentence. Despite these hurdles, Zhao remains a key figure in the crypto industry and is poised for a potential return to Binance if pardoned.

Zhao himself has expressed uncertainty about the potential pardon, although he acknowledged applying for one. On a recent podcast, he clarified that there were no fraud charges against him and that the plea deal involved a single infraction.

Trump Administration’s Crypto Stance

The Trump administration has maintained a relatively positive stance towards cryptocurrency. This includes dismissing various enforcement actions and pardoning notable figures in the crypto world, such as BitMEX founders and Silk Road’s Ross Ulbricht.

However, the potential Binance founder pardon faces challenges, particularly regarding optics. Concerns have been raised over Trump’s connections to the crypto sector, including ventures like World Liberty Financial. These ties could complicate the pardon process, reflecting broader issues of conflict of interest.

Market Reactions and Implications

The crypto market is closely monitoring developments surrounding the Binance founder pardon. Industry experts believe that the charges against CZ could be viewed as an overreaction following the FTX scandal involving Sam Bankman-Fried. Unlike SBF, CZ was not accused of fraud, leading many to view his legal repercussions as excessive.

As the situation evolves, the decision on a potential pardon remains fluid, influenced by other pressing geopolitical matters. Nevertheless, the prospect of a pardon could significantly impact Binance’s operations and the broader crypto landscape.

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After pleading guilty to operating an unlicensed money transferring business, Legkodymov’s legal representation officially requested a presidential pardon from Trump. Legkodymov was indicted in January 2023, admitted his guilt in December, and was sentenced to time served in July 2024 after spending approximately 18 months in custody.

Ivan Melnikov, the Vice President of the Russian branch of the International Committee for Human Rights, suggested that Legkodymov was a scapegoat in a political campaign against the crypto market and skilled Russian programmers. He added that the plea for pardon is based on the optimism that the US might adopt a more balanced and equitable approach towards digital finance.

As per the indictment, Legkodymov was involved in an operation that enabled the transmission of illegal funds via his role at Bitzlato. US authorities claim that hundreds of millions of dollars were transferred from Bitzlato to the dark web’s Hydra Marketplace, with the exchange receiving approximately $15 million linked to ransomware attacks.

Reportedly, French authorities are seeking to extradite Legkodymov to face similar charges after his US sentence. It remains uncertain if Trump has received the pardon request or if he intends to act on it. As of the time of reporting, Cointelegraph had not received a response from the White House.

Since assuming presidency in January, Trump has granted at least 58 presidential pardons. Among those pardoned were Ross Ulbricht, the founder of Silk Road, who was serving two life sentences in federal prison, and four ex-executives of the cryptocurrency exchange BitMEX: Arthur Hayes, Benjamin Delo, Gregory Dwyer, and Samuel Reed.

Changpeng “CZ” Zhao, the former CEO of Binance, revealed in May that he had sought a pardon from Trump. Zhao admitted to one felony charge in November 2023 as part of an agreement with US authorities and Binance, leading to a four-month prison term. There are reports that former FTX CEO Sam Bankman-Fried is also seeking a federal pardon from Trump by making appearances on conservative news channels and distancing himself from the Democratic Party. In 2024, Bankman-Fried was sentenced to 25 years in prison and is currently housed at the Federal Correctional Institution in Terminal Island.

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The Binance founder, also known as CZ, disclosed on a May 6 episode of the Farokh Radio podcast that he would welcome a pardon, adding that his legal team had already submitted the necessary paperwork. “My lawyers are on it,” Zhao remarked, stating that he put in the request after Bloomberg and The Wall Street Journal published reports in March alleging his pursuit of a pardon from Trump in the context of a potential business collaboration between the Trump family and Binance.US.

Zhao initially refuted these reports, but later admitted on the podcast that he figured “if these reports are circulating, I should officially apply.” He also acknowledged that Trump’s pardon of three BitMEX founders, including Arthur Hayes, inspired his application.

Zhao stated that he lodged the application about two weeks earlier. At the time of the Bloomberg and The Wall Street Journal publications, Zhao said that “no convict would reject a pardon” and claimed he is the only individual in U.S. history to have been incarcerated for a Bank Secrecy Act violation.

In November 2023, Zhao pleaded guilty to a money laundering offense as part of a settlement Binance reached with U.S. authorities. The exchange paid a hefty $4.3 billion fine, with Zhao contributing $50 million. Consequently, he was compelled to resign as CEO.

Afterwards, Zhao received a four-month prison sentence and was barred from working at Binance as part of his plea agreement. According to the U.S. Department of Justice, a pardon would not annul Zhao’s money laundering conviction, but it could potentially enable him to reassume a managerial or operational role at Binance.US.

Despite being a Binance shareholder, Zhao stated at Binance Blockchain Week in November that he has “no intentions to return as CEO.” He added, “The team is excelling and doesn’t need me back.”

Since his release from prison, Zhao has undertaken advisory roles in Pakistan and Kyrgyzstan, aiding in cryptocurrency regulation and the implementation of blockchain solutions.

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It was revealed on Thursday that Benjamin Delo, Arthur Hayes, and Samuel Reed, all co-founders of BitMEX, had received presidential pardons. These individuals had previously admitted to charges of money-laundering. The pardons are seen as a positive sign by the crypto industry, which had been hopeful of more relaxed regulations under Trump’s administration. The former president had actively sought support from crypto donors during his campaign.

According to a Reuters report from January, the founders of BitMEX, Delo, Hayes, and Reed, were accused by prosecutors of intentionally breaching the Bank Secrecy Act between 2015 and 2020. They were alleged to have failed in implementing anti-money laundering and “know your customer” programs. BitMEX has yet to respond to Reuters’ request for comment on this matter.

Furthermore, Trevor Milton, the founder of the now-defunct electric and hydrogen-powered truck manufacturer Nikola NKLAQ, who was found guilty of fraud, has also been pardoned by the president.

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According to a recent report from Fortune, insiders in the political scene have already labeled SBF’s pardon attempt as a desperate move. In a bid to increase his chances, he has rebranded himself, aligning more with Republican ideologies.

Last week, Bankman-Fried broke prison rules by giving an unauthorized interview to Tucker Carlson from his jail cell. In the interview, he praised Republicans while distancing himself from Democrats. This violation landed him in solitary confinement.

An anonymous crypto lobbyist assessed SBF’s chances of a successful pardon campaign as “near zero,” taking into account the dynamics of Trump’s administration.

SBF’s strategic pivot towards right-wing views could be seen as an effort to charm Trump into granting him a pardon, following his conviction in the FTX fraud case. There’s speculation that his case might pique Trump’s interest—not due to the crypto connection, but because of Trump’s own issues with the legal system.

A recent New York Times report revealed that his family and allies are lobbying for his pardon, leveraging Trump’s history of granting clemency to those close to him or those who share his grievances.

However, the probability of SBF’s pardon bid succeeding is slim. SBF hasn’t shown any remorse and lacks substantial support. Furthermore, Trump’s commitment to “law and order” could outweigh his grievances with the legal system.

Legal experts warn that pardoning Bankman-Fried might alienate Trump’s support base, especially the working-class Americans and small investors who suffered losses due to FTX’s downfall.

In his first week in office, Trump pardoned Ross Ulbricht, the founder of Silk Road, delivering on a campaign promise. He condemned the prosecutors involved, deeming Ulbricht’s double life sentence plus 40 years as “excessive.”

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