Wall Street Journal: Trump family in deal talks with Binance

Authors: Rebecca Ballhaus, Patricia Kowsmann, Angus Berwick, Josh Dawsey and Caitlin Ostroff

Translated by: Liam

Source: WSJ

According to people familiar with the matter, representatives of President Trump's family have negotiated with Binance.US to acquire a stake in the latter. The move will allow Trump to do business with Binance US, which admitted to violating "anti-money laundering regulations" in 2023. Meanwhile, Binance founder Changpeng Zhao, who served four months in jail after pleading guilty, has been urging the Trump administration to pardon him, people familiar with the matter said. Zhao remains Binance’s largest shareholder. Last year, Binance approached Trump allies with a business deal with the Trump family as part of a plan to bring the exiled company back to the United States. It is unclear what form the Trump family’s stake would take if a deal is reached, or whether it would depend on a pardon. Possibilities include the Trump family taking an equity stake or a deal through World Liberty Financial, a cryptocurrency company backed by the Trump family and founded last September, people familiar with the matter said.

Steve Witkoff, a longtime Trump friend who is currently his lead negotiator on the Middle East and the war in Ukraine, was involved in the deal talks, according to people familiar with the matter. An administration official denied Witkoff's involvement and said he was divesting from his business interests.

Trump has increasingly blurred the lines between his presidency and his business ventures. His family has been profiting from his election victory, with first lady Melania Trump signing a $40 million documentary deal and Trump seeking tens of millions of dollars in settlements from companies he sued years ago, much of which has been used to fund his presidential library.

But if a felon seeks a government pardon and he participates in it, it will be an unprecedented overlap between his business and government. The Binance.US stake will also be a stunning expansion of the family's crypto business as Trump signs a series of executive orders favorable to the crypto industry.

World Liberty Financial declined to comment. The Trump Organization did not respond to a request for comment. Binance.US declined to comment and Binance did not respond to a request for comment.

Binance is the world's largest cryptocurrency exchange, founded by Zhao Changpeng in Shanghai in 2017, but later claimed that its headquarters were not in Shanghai.

U.S. officials said the exchange facilitated transactions with sanctioned groups such as Hamas and the Islamic State and encouraged American users to hide their locations to enable the company to circumvent U.S. anti-money laundering laws.

In 2023, Binance agreed to pay a total of $4.3 billion in fines to resolve the charges. As part of the settlement, Zhao Changpeng was required to resign as Binance's CEO, but he remains a major shareholder. He was released from prison in September last year and now lives in Abu Dhabi.

On Wednesday, Binance said UAE state-backed investor MGX acquired a minority stake in the company for $2 billion, the first sovereign institutional investment in the exchange.

For Binance, Zhao's pardon will clear the way for the company to return to the U.S. market and make it easier to do business overseas.

For the Trump family, a stake in Binance.US will give it a chance to participate in Coinbase's potential revival in the U.S. cryptocurrency trading market, which is booming as the government withdraws regulatory threats to restrict its development.

Returns

Binance.US's business fell sharply after regulatory actions, and Binance began exploring a return to the U.S. market after Trump won the election last year. The company told people it was willing to make a deal with Trump’s company and wanted to eliminate its legal problems, according to people familiar with the matter.

After Trump’s victory, Binance set up a working group under Chief Executive Officer Richard Teng that included senior legal and compliance staff to evaluate options. Executives knew Zhao’s conviction complicated any return because it is difficult to sign a new business partner in the United States with a felon as a majority shareholder.

Binance executives saw potential legal room for maneuver in the story of Justin Sun, a China-born cryptocurrency entrepreneur who invested in a Trump cryptocurrency company last fall while facing civil charges from the U.S. Securities and Exchange Commission, according to a person familiar with the matter.

Binance executives saw potential legal room for maneuver in the story of Justin Sun, a China-born cryptocurrency entrepreneur who invested in a Trump cryptocurrency company last fall while facing civil charges from the U.S. Securities and Exchange Commission (SEC).

Sun Yuchen is the founder of the public blockchain TRON. He invested $30 million in World Liberty Financial, a Trump-backed cryptocurrency company, in November last year, becoming its largest investor. Last month, the U.S. Securities and Exchange Commission (SEC) asked the court to suspend the fraud lawsuit against Sun Yuchen and his three companies.

People familiar with the matter said that after Sun Yuchen's investment, Binance executives discussed the same plan internally: injecting capital into World Liberty Financial in exchange for Zhao Changpeng's pardon.

Sun Yuchen called the SEC's lawsuit groundless, but he did not respond to a request for comment. The White House has not yet responded to questions about whether Trump played a role in the SEC's decision to suspend the lawsuit against Sun Yuchen.  

Talks

Trump’s friend Vitkov was involved in the talks with Binance, according to people familiar with the matter. If the deal goes through, Vitkov could also be a beneficiary. Vitkov and his two sons co-founded World Liberty Financial with the Trumps.

Vitkov has said he left the company after his White House role.

Since its founding last fall, World Liberty Financial has been criticized for potentially allowing foreign entities to provide funds to entities that have business dealings with the U.S. government, thereby funneling money to Trump and his family without public disclosure.  

An administration official denied that Witkoff, who is in the Middle East this week for ceasefire talks between Israel and Hamas and arrives in Moscow on Thursday, where he may meet with Russian President Vladimir Putin, was involved in any negotiations.

Talks about a deal and Binance’s push for Zhao’s exoneration have been ongoing since Trump took office, people familiar with the matter said.

Last month, the U.S. Securities and Exchange Commission (SEC) asked the court to suspend another civil lawsuit, this one against Binance and Binance.US, while an SEC working group works on developing a regulatory framework for cryptocurrencies.

The exoneration could help Binance repair some of its business that has been damaged by a long-running legal dispute.

In 2019, under scrutiny from U.S. officials, Zhao Changpeng set up a separate Binance.US exchange for U.S. customers. In reality, it mainly served as a decoy, distracting regulators while global exchanges continued to attract U.S. traders.

In 2023, most of Binance.US's senior employees left the company as it faced legal woes and the U.S. exchange now had fewer traders than its competitors. That year, the platform's market share in the U.S. peaked at 27% before plummeting to just over 1%. The year before, it had been valued at $4.5 billion.  

President Trump hosted the first White House Cryptocurrency Summit the day after signing an executive order to establish a strategic reserve of Bitcoin.

The amnesty could clear the way for Binance and Binance.US to merge into one global company. It would also open the door to the European Union, which bars companies whose shareholders have been convicted of crimes such as money laundering from applying for cryptocurrency regulatory licenses.

Crypto President

The Binance talks are the latest in a series of actions by Trump to embrace the cryptocurrency industry politically and personally.

Presidents typically place their assets in a blind trust while in office and avoid striking business deals to avoid the appearance of impropriety. Trump has taken a different approach, placing his assets under the control of his children, who continue to conduct the business dealings.

As president, Trump is not subject to the "conflict of interest" rules that apply to other members of the administration, but he must abide by the Constitution's prohibition on public officials accepting payments from foreign governments. The Trump Organization has said it will not do business with foreign governments, but has not ruled out deals with foreign private companies.