President Donald Trump’s decision to pardon a money-laundering crypto billionaire who has helped enrich the Trump family surprised even the president’s own advisers.
The president pardoned Binance founder Changpeng “CZ” Zhao last week on the advice of “a lot of very good people” who said that “what he did is not even a crime,” Trump told reporters.
Zhao had pleaded guilty in 2023 to violating anti-money-laundering rules after Binance allowed Iranian crypto exchanges, Russian drug traffickers, Hamas militants, and other criminal groups to move billions of dollars through the platform.
After Trump was elected, though, Binance formed a high-level task force to figure out how to funnel money to the Trump family’s nascent crypto venture, World Liberty Financial, in a bid to secure a pardon for Zhao, the Wall Street Journal reported.
World Liberty was founded by Trump’s sons Eric and Don Jr. together with Trump’s special envoy Steve Witkoff and his son Zach.
Binance ultimately came up with a scheme to help raise World Liberty’s market capitalization from $127 million to more than $2.1 billion, according to the Journal.
The platform deployed more than a dozen engineers to build the blockchain technology governing World Liberty’s USD1 cryptocurrency, a so-called “stablecoin” whose value is pegged to the U.S. dollar.
Binance then struck a deal for a state-owned Emirati investment firm called MGX to buy a minority stake Zhao’s platform using $2 billion of USD1. The choice of stablecoin confused some people close to the deal, according to the Journal.
Soon before the pardon was announced, Witkoff—who sources said had met with Zhao in Dubai and inquired about his case with Trump administration officials—said he was confident Trump would pardon Zhao.
Other administration officials were surprised, though, given the optics of pardoning the head of a foreign company convicted of enabling terrorists and drug traffickers, the Journal reported.
Binance was originally based in Zhao’s native China but has since transferred to Malta. (It also has a barebones U.S. presence, Binance.US.)
Zhao, who is based in Dubai, United Arab Emirates, emigrated to Canada when he was 12 years old and now holds French, Canadian, and Emirati citizenship.
The Journal reported that Binance had hired at least two separate lobbying firms to push for Zhao’s pardon, which sparked an immediate backlash even among some MAGA loyalists who said it looked like “massive fraud” was taking place.
Some of the president’s advisers had similarly lobbied against the pardon over concerns that pardoning a Trump family business associate could trigger a congressional investigation if Democrats take control of the House in next year’s midterm elections, according to the Journal.
The deal that Binance coordinated with MGX exponentially increased World Liberty’s market clout and boosted sales of World Liberty’s other token, WLFI, which has generated about $1.4 billion in revenue over the past year.
A spokesperson for World Liberty confirmed to the Journal that Binance provided World Liberty with the so-called “smart contracts” governing USD1 to save the company “the headache of reproducing them,” but claimed they were “not in exchange for anything.”
A lawyer for Binance said the company “did not control the stablecoin chosen by MGX” and denied that the platform had facilitated the relationship between World Liberty and the Emirati firm.
White House press secretary Karoline Leavitt told the Journal in a statement that, “Neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest.”
An administration official also said that Witkoff had not expressed confidence in Zhao’s pending pardon or surveyed people about his case, though the World Liberty spokesperson told the Journal that Zack Witkoff and Zhao were friends.
A White House official also denied to the Journal that Zhao’s pardon had caused any surprise within the administration.
The Daily Beast has reached out to the White House, World Liberty Financial, and Binance for comment.
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