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Changpeng Zhao, the multibillionaire founder of crypto exchange Binance, spent four months<\/a> last year locked in a federal prison. After US president Donald Trump pardoned Zhao<\/a> in October, the government has recast him as a martyr.<\/p>\n Zhao, who goes by CZ, pleaded guilty<\/a> in November 2023 to failing to maintain an effective anti-money-laundering program at Binance. In parallel, Binance admitted to violating US sanctions and settled with financial regulators, which accused the company<\/a> of failing to report suspicious transactions involving terror groups, child exploitation networks, and cybercriminals, among other violations. In a particularly incriminating exchange detailed in court documents, one Binance employee said to a colleague<\/a>, \u201cWe see the bad, but we close 2 eyes.\u201d<\/p>\n As part of their respective settlement deals, Zhao agreed<\/a> to forfeit his role as Binance CEO, and Binance agreed<\/a> to leave the US, accept supervision by a US-appointed compliance monitor, and pay a record $4.3 billion penalty.<\/p>\n Less than two years later, the narrative has flipped. On October 23, Trump struck the charges<\/a> from Zhao\u2019s criminal record. The Binance founder was a victim of the \u201cBiden administration\u2019s war on crypto,\u201d a White House spokesperson declared.<\/p>\n The decision to pardon Zhao will reverberate throughout the US crypto exchange market, which Binance could seek to reenter, legal experts claim. It may also come with long-term political consequences for the crypto industry after Trump\u2019s presidency ends.<\/p>\n Whether Zhao\u2019s pardon was justified has been hotly disputed, particularly in light of connections between Binance and World Liberty Financial, a crypto business founded by Trump and his sons. (Through a corporate entity, the Trump family owns a 38 percent stake<\/a> in World Liberty Financial\u2019s parent company.) In May, Binance agreed to receive a $2 billion investment denominated in USD1<\/a>, a coin issued by World Liberty Financial, which could earn tens of millions of dollars from the arrangement. In July, Bloomberg reported<\/a> that Binance had developed the codebase for USD1.<\/p>\n Remarkably, Trump claims to know very little about Zhao. \u201cOK, are you ready? I don’t know who he is,\u201d Trump told 60 Minutes<\/em><\/a> in an interview that aired on November 2. \u201cI can only tell you this. My sons are into [crypto],\u201d he said later in the interview.<\/p>\n Zhao\u2019s legal representatives and industry allies<\/a> have defended the pardon as a rightful corrective. \u201cCZ is the first and only known first-time offender in US history to receive a prison sentence for this single, non-fraud-related charge,\u201d wrote Teresa Goody Guill\u00e9n, partner at law firm Baker & Hostetler, which represents Zhao, in a post on X<\/a>.<\/p>\n<\/div>\n