Pardon: Zhao Changpeng granted, Binance may return to the US market

A presidential pardon not only changes one person's fate but also has the potential to reshape the competitive landscape of the global cryptocurrency market. From federal prisoner to free man, Zhao Changpeng's road to redemption is a perfect synergy of politics and business. "Many people say he's innocent and that he's simply being persecuted by the Biden administration," Trump told reporters. The Binance founder had just received his pardon. On October 23rd, US Eastern Time, Trump signed a presidential pardon, granting an unconditional pardon to Changpeng Zhao, the convicted founder of the cryptocurrency exchange Binance. The 430-day legal nightmare of Binance founder Changpeng Zhao (CZ) has come to an end. White House Press Secretary Carolyn Levitt said in a statement that Trump "exercised his constitutional authority" to pardon Zhao, emphasizing that "the Biden administration's war on cryptocurrency is over." Within hours, Zhao Changpeng expressed his gratitude on social media platform X: "I am deeply grateful for today's pardon and thank President Trump for upholding America's commitment to fairness, innovation, and justice. We will do everything we can to help make America the capital of crypto." Just recently, the founder of the world's largest cryptocurrency exchange was serving a four-month sentence in a California federal prison for violating US anti-money laundering regulations, and was not scheduled for release until September 2024. 01 From Peak to Valley Back in 2023, Binance and Changpeng Zhao were at the peak of their legal crisis. The US Department of Justice imposed a record-breaking $4.3 billion fine on Binance and demanded that it be banned from operating in the United States. Details of the case revealed that Binance had become a massive money laundering hub, through which sanctioned groups and criminal organizations laundered billions of dollars in illicit funds. Changpeng Zhao also personally paid approximately $50 million in fines and pleaded guilty to anti-money laundering violations. "The Biden administration's war on cryptocurrency is over," White House Press Secretary Carolyn Levitt said after the pardon was announced. These words clearly drew a policy dividing line.

02 The lobbying power behind the pardon

Zhao Changpeng's pardon was not accidental. The Wall Street Journal previously reported that Binance began contacting Trump's allies last year, proposing a business agreement with his family as part of a plan to return the company to the United States.

For nearly a year, the company has been seeking a pardon for Zhao Changpeng. Earlier this year, Binance hired lobbyist Chase McDowell to assist in seeking a pardon.

Lobbying disclosure documents show that Zhao Changpeng also hired Washington lawyer Theresa Goody Guillen to operate an "executive rescue."

Trump stated bluntly at a press conference on Thursday: "I don't know him, and I don't believe I've ever met him, but I'm told he has a lot of support, and they say what he did wasn't even a crime."

03 Trump Family's Cryptocurrency Ambitions

Binance's business dealings with the Trump family have become the most eye-catching background in the pardon event.

Since Trump's election, Binance has been a key supporter of his family's cryptocurrency business, World Liberty Financial. This business has driven a huge increase in Trump's personal wealth. Binance has been a key driver of the growth of USD1, the dollar-pegged cryptocurrency issued by World Freedom Finance. World Freedom Finance received its first major breakthrough this spring when Binance accepted a $2 billion investment in USD1 from an outside investor. Over the past year, World Freedom has generated revenue for the Trump family far exceeding the annual returns of its real estate portfolio. Immediate Crypto Market Reaction: Following the news of the pardon, the cryptocurrency market experienced a broad-based "relief rally." Binance's primary trading token, BNB, was the most notable performer, with its price surging as much as 8% at one point. As the third-largest cryptocurrency after Bitcoin and Ethereum, BNB has a market capitalization of $157 billion. The rally spread across the entire crypto market. Bitcoin, a bellwether for the market, rose 3%, and Ethereum gained 3.7%. Jaime Baeza, managing partner of crypto hedge fund AnB Investments, characterized the market reaction as a "pressure relief rally," reflecting previous concerns about Binance and Changpeng Zhao's legal issues. Unusual trading activity was seen in the market before the pardon announcement. On-chain detective Euan discovered that a crypto wallet had earned $56,522 on the prediction market platform Polymarket by betting that Trump would pardon Changpeng Zhao. This isn't the trader's first "precision" operation. Previously, he precisely shorted Bitcoin and Ethereum hours before Trump's tariff announcement caused prices to plummet, profiting millions. "Looks like clear insider information," on-chain investigator Coffeezilla posted to his 736,600 followers on the X platform on Thursday. 06 Controversy and Double Standards Zhao Changpeng's pardon has sparked controversy in the legal community.

CZ Zhao’s crypto lawyer, Teresa Goody Guillen, said on Thursday that the pardon was the right decision because her client “had only one charge of failing to establish an effective compliance program. No fraud, no victims, no criminal history. No money laundering.”

“CZ is the first and only first-time offender in U.S. history to be sentenced to imprisonment for this single, unrelated charge of fraud,” she emphasized.

However, previous charges by the Department of Justice paint a different picture. Prosecutors claim that the illegal transactions facilitated by Binance under Zhao Changpeng’s supervision caused “significant damage to U.S. national security.”

07 The pardon industry chain emerges

CZ Zhao is not the only cryptocurrency executive to be pardoned by Trump. In March of this year, Trump also pardoned Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, who had previously pleaded guilty to anti-money laundering violations. According to Bloomberg, an unprecedented "pardon industry chain" is rapidly emerging. Businesses and influential individuals are rushing to submit applications and intensifying lobbying efforts, carefully crafting cases that suit Trump's preferences and hiring lawyers with close ties to the current administration. The entire process can cost over $1 million. 08 The Prospects of Binance Returning to the United States This pardon is likely to pave the way for Binance, the world's largest cryptocurrency exchange, to return to the United States. It could also prematurely end the Department of Justice's three-year monitoring of Binance, which aims to ensure the company's compliance with US financial crime laws. However, without additional approval from Trump or the Treasury Secretary, the pardon may not end the Treasury Department's separate independent oversight. Seoyoung Kim, a finance professor at Santa Clara University, emphasized that Binance's return is "far from guaranteed" and that it still needs to apply for operational approval from the U.S. Securities and Exchange Commission and the CFTC. With the pardon, Zhao Changpeng's future has begun. He wrote on X: "We will do everything we can to help make the United States the capital of crypto and advance Web3 globally." Trump's pardon of Zhao Changpeng not only changes the fate of one entrepreneur but also has the potential to reshape the power dynamics of the global cryptocurrency market. With Binance's potential return to the United States and the deepening of Zhao Changpeng's business partnership with the Trump family, all this signals a new round of reshuffles in the cryptocurrency world.

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