President Trump has pardoned crypto executive Changpeng Zhao, who co-founded one of the world’s largest cryptocurrency exchanges and was convicted under the Biden administration of charges related to money laundering.
“President Trump exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden administration in their war on cryptocurrency,” White House press secretary Karoline Leavitt said Thursday in a statement. “In their desire to punish the cryptocurrency industry, the Biden administration pursued Mr. Zhao despite no allegations of fraud or identifiable victims.”
Mr. Trump signed the pardon on Wednesday, the White House said.
Mr. Zhao, a Chinese-born Canadian who co-founded the Binance crypto exchange, was sentenced to four months in prison after reaching a deal with the Biden Justice Department. He pleaded guilty to charges of enabling money laundering at Binance, which he ran at the time.
As part of the plea deal, Binance had to pay more than $4 billion in fines and forfeiture. Mr. Zhao, one of the world’s richest men, agreed to pay $50 million in fines and agreed to step down as CEO of Binance.
“These actions by the Biden administration severely damaged the United States’ reputation as a global leader in technology and innovation,” Ms. Leavitt said. “The Biden administration’s war on crypto is over.”
Democrats criticized the pardon, noting that Binance helped facilitate a $2 billion investment in one of the Trump family-backed crypto ventures, World Liberty Financial.
“First, Changpeng Zhao pleaded guilty to a criminal money laundering charge. Then he boosted one of Donald Trump’s crypto ventures and lobbied for a pardon. Today, Donald Trump did his part and pardoned him,” said Sen. Elizabeth Warren, Massachusetts Democrat. “If Congress does not stop this kind of corruption in pending market structure legislation, it owns this lawlessness.”
When asked about the Democratic criticism, Ms. Leavitt said the pardon was reviewed by the White House Counsel’s Office.
“The president and the White House have a very thorough examination of every pardon that comes to the president’s desk,” she said at the White House press briefing.
Later, Mr. Trump said the pardon was “recommended by people” and insisted he never met Mr. Zhao.
“A lot of people say that he wasn’t guilty of anything. He served four months in jail, and they say that he was not guilty of anything,” the president said.
Prosecutors alleged that Binance had become a central hub for terrorists, hackers and human traffickers to move around their money without generating attention from authorities. They argued in court documents that Mr. Zhao was overseeing the alleged illegal activities.
Financial exchanges in the U.S., including those that specialize in cryptocurrency, are required to follow strict laws to identify their users, or so-called “know your customer rules.”
Prosecutors had sought a three-year sentence for Mr. Zhao, saying a stiff sentence would send a signal to the crypto market. Mr. Zhao’s attorneys had pushed for probation.
In a blog post at the time, Binance wrote that it took “responsibility for this past chapter.” The company remains one of the world’s largest crypto exchanges, processing more than $65 billion every day, according to its website.
Mr. Zhao has an estimated net worth of $85 billion and remains one of the most influential figures in the crypto market.
The pardon reflects Mr. Trump’s embracing of the crypto market after the industry launched a massive effort last year to finance his campaign, following four years of the Biden administration’s efforts to regulate the market.
Since taking office, the Trump administration has dropped crypto lawsuits and investigations, including the one against Binance. The president’s family has also ramped up its crypto investments.
On Mr. Trump’s second day in office, he pardoned Ross Ulbricht, who created the dark web marketplace Silk Road, which operated on crypto payments.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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