Recenlty Fox Business Senior Correspondent Charles Gasparino broke a story that sent shockwaves through cryptocurrency markets and Washington political circles alike. According to sources close to Changpeng Zhao, the founder and former chief executive of Binance, discussions inside the White House about a potential presidential pardon for the convicted crypto executive were "heating up."
The timing was remarkable. Just hours after Gasparino's report, global cryptocurrency markets entered a historic freefall, with Bitcoin plummeting below $110,000 after President Donald Trump announced a 100 percent tariff on Chinese goods. Over the next 48 hours, more than $19 billion in leveraged cryptocurrency positions were liquidated in what became the largest single liquidation event in the history of digital assets. The crypto market capitalization, which had been hovering around $4.2 trillion, shed hundreds of billions of dollars in value as traders grappled with escalating U.S.-China trade tensions and mounting geopolitical uncertainty.
Yet amid the chaos, the prospect of a presidential pardon for Zhao, universally known in crypto circles as "CZ," represented something potentially more consequential than short-term market volatility. It raised fundamental questions about accountability in the cryptocurrency industry, the boundaries of presidential power, the influence of family business interests on executive decision-making, and the future trajectory of crypto regulation in the United States.
To understand why this pardon matters requires understanding who Changpeng Zhao is, what he was convicted of, why Trump might grant clemency, and what such a decision would mean for an industry struggling to define its relationship with law, regulation, and mainstream legitimacy. This is that story.
The Rise and Fall of Binance's Crypto Emperor
Changpeng Zhao built Binance into the world's largest cryptocurrency exchange through a combination of technical innovation, aggressive global expansion, and a willingness to operate in regulatory gray zones that more cautious competitors avoided. Founded in 2017, Binance quickly became synonymous with high-volume crypto trading, offering users access to hundreds of digital assets, advanced trading features, and some of the lowest fees in the industry.
By 2021, Binance was processing trading volumes that dwarfed its nearest competitors, handling billions of dollars in transactions daily across spot markets, derivatives, and other crypto products. Zhao himself became a billionaire many times over, his personal fortune tied primarily to his holdings in Binance's native token, BNB. He cultivated a public persona as crypto's philosopher-king: a t-shirt-wearing technologist who spoke in maxims about financial freedom and the power of blockchain technology to democratize finance.
But Binance's spectacular growth came with a problem that would eventually prove fatal to Zhao's leadership. The exchange, in its race to dominate global markets, had taken what prosecutors would later characterize as a deliberate approach to evading U.S. financial regulations. Zhao's philosophy, captured in internal communications that would later surface in court filings, was summed up in a phrase that became infamous: "Better to ask forgiveness than permission."
The Department of Justice Closes In
For years, U.S. authorities watched Binance with growing concern. The exchange claimed to have exited the American market, blocking U.S. users from its main platform. In reality, prosecutors would later allege, Binance had done little to prevent Americans from accessing its services through virtual private networks and other workarounds. More troubling still, the exchange had allegedly processed transactions for users in countries under U.S. sanctions, including Iran, Cuba, and Syria.
The investigation that would ultimately bring down Zhao involved multiple federal agencies working in concert. The Department of Justice's Criminal Division, the National Security Division, and the U.S. Attorney's Office for the Western District of Washington collaborated with the Treasury Department's Financial Crimes Enforcement Network and the Office of Foreign Assets Control. The Commodity Futures Trading Commission joined the effort, examining whether Binance had illegally offered derivatives trading to U.S. customers.
At the heart of the case was the Bank Secrecy Act, a 1970 law designed to help law enforcement detect and prevent money laundering. The statute requires financial institutions operating in the United States to implement anti-money laundering programs, maintain adequate records, and report suspicious transactions to federal authorities.
Understanding the Bank Secrecy Act
The Bank Secrecy Act represents the cornerstone of U.S. efforts to combat money laundering, terrorist financing, and other financial crimes. Passed in 1970 and amended multiple times since, most notably by the USA PATRIOT Act after September 11, 2001, the BSA requires financial institutions to serve as partners with law enforcement in detecting criminal activity.
Key requirements include maintaining records of cash purchases of negotiable instruments, filing reports when daily transactions exceed $10,000, reporting suspicious activity, and implementing comprehensive anti-money laundering programs with internal controls, compliance officers, employee training, and independent audits. The law applies not just to traditional banks but to money services businesses, including cryptocurrency exchanges that serve U.S. customers.
Violations can result in civil penalties, criminal charges, and in some cases, prison time for executives who knowingly fail to maintain adequate programs. For Zhao, this last provision would prove devastating.
The Guilty Plea and Sentencing
On November 21, 2023, in a Seattle federal courthouse, Changpeng Zhao stood before Judge Brian Tsuchida and pleaded guilty to violating the Bank Secrecy Act. The charge was specific: causing Binance to fail to maintain an effective anti-money laundering program. By the terms of the plea agreement, Zhao admitted he had prioritized growth over compliance, allowing Binance to process billions of dollars in transactions without adequate safeguards against money laundering.
The settlement was historic in scope. Binance agreed to pay $4.3 billion in penalties, forfeiture, and fines, making it one of the largest corporate criminal settlements in U.S. history. The company would be required to retain an independent compliance monitor for three years and undergo extensive remediation of its anti-money laundering and sanctions compliance programs.
Zhao himself agreed to pay a $50 million personal fine, step down as Binance's CEO, and accept a ban from any involvement in managing the company for three years. Richard Teng, a former Abu Dhabi financial regulator who had joined Binance as its regional markets head, would take over as chief executive.
Prosecutors had sought a 36-month prison sentence for Zhao, arguing that the scale of his violations was unprecedented and that a strong deterrent was necessary to send a message to the crypto industry. In their sentencing memorandum, they described Binance as operating on a "Wild West" model, with Zhao deliberately gambling that he would not get caught and that any consequences would be worth the profits.
On April 30, 2024, Judge Richard Jones sentenced Zhao to four months in prison, far less than prosecutors requested but still significant as the first time a cryptocurrency exchange CEO had received custodial time for Bank Secrecy Act violations. "You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity," Jones told Zhao during sentencing.
Zhao served his sentence at a low-security facility and was released in September 2024, having completed his four-month term. But the criminal conviction remained, as did the $50 million fine and the three-year management ban. For a man accustomed to operating at the center of the crypto universe, these restrictions represented a form of professional exile.
And for Zhao, that exile created a powerful incentive to seek one of the most extraordinary remedies available under the U.S. Constitution: a presidential pardon.
From Bitcoin Skeptic to Crypto Champion: Trump's Evolution
To understand why Donald Trump might pardon Changpeng Zhao requires understanding one of the more remarkable political transformations of the 2024 election cycle: Trump's conversion from cryptocurrency skeptic to industry champion.
During his first term as president, from 2017 to 2021, Trump had expressed deep skepticism about digital currencies. In July 2019, he tweeted: "I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air." He warned that cryptocurrencies could "facilitate unlawful behavior, including drug trade and other illegal activity" and insisted that "we have only one real currency in the USA, and it is stronger than ever."
This stance aligned with the views of many traditional financial regulators and law enforcement officials who saw cryptocurrencies primarily as tools for criminals, tax evaders, and sanctions violators. During Trump's first term, federal authorities pursued aggressive enforcement actions against cryptocurrency businesses, though nothing approaching the scale of what would come during the Biden administration.
The Turning Point: Nashville and Beyond
The transformation began in earnest during the 2024 campaign. In July 2024, Trump appeared at the Bitcoin 2024 conference in Nashville, Tennessee, becoming the first major presidential candidate to address the annual gathering of cryptocurrency enthusiasts. Standing before a packed crowd, Trump delivered a message that electrified the audience: if elected, he would make the United States "the crypto capital of the world" and end what he characterized as the Biden administration's "war" on the industry.
Trump promised to fire Securities and Exchange Commission Chairman Gary Gensler, whose aggressive enforcement approach had made him a villain in crypto circles. He pledged to establish a presidential advisory council on digital assets. Most dramatically, he committed to creating a "strategic Bitcoin reserve," suggesting that the U.S. government should hold cryptocurrency as a national asset, analogous to gold or oil reserves.
The crypto industry responded with enthusiasm and money. Industry executives and investors contributed heavily to Trump's campaign, seeing in his candidacy a chance to reset the regulatory environment. Coinbase CEO Brian Armstrong became one of the largest donors in the 2024 cycle, while other crypto figures poured resources into pro-Trump super PACs and crypto-focused political action committees.
After winning the November 2024 election, Trump moved quickly to deliver on his promises. On January 23, 2025, just three days after his inauguration, he signed an executive order titled "Strengthening American Leadership in Digital Financial Technology." The order revoked Biden-era crypto policies, established a presidential working group on digital asset markets, banned any work on a central bank digital currency, promoted U.S. dollar-backed stablecoins, and directed agencies to provide regulatory clarity to the industry.
Trump appointed David Sacks, a prominent venture capitalist, as the White House "Crypto and AI Czar." Scott Bessent, a crypto-friendly investor, became Treasury Secretary, replacing Janet Yellen, who had expressed skepticism about digital assets. Paul Atkins, seen as more industry-friendly than his predecessor, took over as SEC Chairman.
In March 2025, Trump convened the first-ever White House Crypto Summit, where he signed an executive order establishing a Strategic Bitcoin Reserve and broader Digital Assets Stockpile. The reserve would initially be funded by cryptocurrencies seized through criminal forfeitures, later expanding to include assets beyond Bitcoin.
By any measure, Trump had delivered on his campaign promises to the crypto industry. But there was more to the story than policy changes and political appointments. Trump and his family had also become direct participants in the crypto economy, creating new ventures that blurred the line between public policy and private profit.
The Trump Family's Crypto Empire
In September 2024, before Trump returned to office, his sons Donald Jr., Eric, and Barron founded World Liberty Financial, a decentralized finance platform that listed President Trump as "co-founder emeritus" (later changed to reflect his role). The project launched its WLFI governance token in October 2024, raising millions from early investors.
In January 2025, just days before inauguration, Trump launched a meme coin bearing his name, the $TRUMP token. Within hours, it achieved a market capitalization in the billions, dramatically increasing the Trump family's on-paper wealth. First Lady Melania Trump followed with her own $MELANIA coin. Critics immediately raised concerns about presidents and their families profiting from financial instruments while in office, but Trump defenders argued these were legitimate business ventures conducted through trusts.
The most significant development came in March 2025, when World Liberty Financial announced plans to launch USD1, an institutional-ready stablecoin backed by U.S. Treasury bills and cash equivalents. BitGo, a prominent digital asset custody provider, would serve as the technical partner, using its Stablecoin-as-a-Service platform to support USD1's operations.
The stablecoin business model is lucrative. Issuers collect the interest earned on the Treasury bills and other assets backing their stablecoins while the tokens themselves maintain a 1-to-1 peg with the U.S. dollar. For a stablecoin with substantial circulation, this can generate tens of millions of dollars in annual revenue with minimal risk.
Then, on May 1, 2025, came the announcement that would raise the most serious conflict-of-interest concerns: Eric Trump revealed at the Token2049 conference in Dubai that MGX, an Abu Dhabi-based sovereign wealth investment firm, would use USD1 to settle its $2 billion investment in Binance, the world's largest cryptocurrency exchange.
The deal was extraordinary on multiple levels. It represented one of the largest institutional investments in any cryptocurrency company, giving MGX a minority stake in Binance while providing the exchange with substantial capital. It marked the first major institutional backing for Binance since its 2023 legal troubles. And it meant that a foreign government-backed entity and a company that had pleaded guilty to violating U.S. sanctions and money laundering laws were directing billions of dollars through a stablecoin controlled by the sitting president's family.
Within weeks, USD1's market capitalization surged past $2 billion, making it the fastest-growing stablecoin in history. If World Liberty Financial retained the yield on reserves backing that circulation, the Trump family could stand to earn tens of millions of dollars annually, though the exact profit-sharing arrangements with Binance and other partners remained opaque.
Democratic senators, led by Elizabeth Warren and Jeff Merkley, demanded records and transparency about the deal, warning that it created unprecedented conflicts of interest. They pointed out that Changpeng Zhao remained Binance's largest shareholder despite having stepped down as CEO, meaning any decision affecting Binance's business or regulatory status could impact Zhao's wealth and, by extension, potentially influence his pursuit of a presidential pardon.
Inside the White House Debate
According to Charles Gasparino's October 10 reporting, the internal White House discussion about pardoning Changpeng Zhao centers on two competing arguments.
Proponents of a pardon reportedly argue that the case against Zhao was weak and the punishment excessive. They note that Zhao was the first person in U.S. history to receive prison time for a single Bank Secrecy Act charge, suggesting that prosecutors singled him out as an example to intimidate the crypto industry. They point to the fact that Zhao served only four months in prison and paid substantial fines, arguing he has already been punished.
Supporters also frame the pardon as part of Trump's broader effort to support the cryptocurrency industry and signal that his administration takes a different approach to financial regulation than the Biden team. Several close Trump advisors have invested in or built careers in crypto, and they see Zhao's conviction as emblematic of regulatory overreach.
The BitMEX precedent strengthens this argument. On March 28, 2025, Trump pardoned Arthur Hayes, Benjamin Delo, and Samuel Reed, the three co-founders of cryptocurrency exchange BitMEX, along with a senior employee, Gregory Dwyer. All four had pleaded guilty to violating the Bank Secrecy Act for failing to maintain adequate anti-money laundering programs. Trump also took the unprecedented step of pardoning HDR Global Trading, the corporation that operated BitMEX, wiping out a $100 million fine that was supposed to be paid within 60 days.
Even more significant was Trump's January 2025 pardon of Ross Ulbricht, the creator of Silk Road, an online marketplace that facilitated illegal drug sales and other criminal activity. Ulbricht had been serving a life sentence without possibility of parole, and his case had become a cause célèbre in crypto circles, with advocates arguing his punishment was disproportionate. Trump's decision to grant clemency fulfilled a campaign promise and was celebrated throughout the cryptocurrency community.
With these precedents established, advocates for Zhao's pardon argue that consistency demands similar treatment for the Binance founder.
But sources familiar with White House deliberations say there is also significant opposition to the pardon, centered on concerns about optics and potential political fallout.
Critics within the administration worry that pardoning Zhao while Trump family businesses are engaged in multibillion-dollar deals with Binance would be perceived as outright corruption. The timing looks particularly problematic: Zhao formally applied for a pardon in May 2025, just weeks after the USD1-MGX-Binance deal was announced. Democratic senators have explicitly warned that any pardon would raise questions about whether it was granted in exchange for financial benefits to the Trump family.
There are also concerns about the precedent a Zhao pardon would set. Unlike Ross Ulbricht, whose life sentence struck many as draconian, or the BitMEX founders, who received only probation and home confinement, Zhao ran what prosecutors described as the largest cryptocurrency exchange in the world while deliberately flouting U.S. law. His conduct enabled money laundering on an unprecedented scale and involved transactions with sanctioned jurisdictions, implicating national security concerns.
Some White House officials reportedly worry that pardoning Zhao would undermine efforts to position the United States as a crypto-friendly jurisdiction with clear rules of the road. The message might be interpreted not as "America welcomes innovation" but as "America is for sale to the highest bidder."
As of mid-October 2025, no final decision had been announced, though Gasparino's sources suggested that discussions were advancing and that Trump himself appeared to be leaning toward granting the pardon as part of his broader reassessment of Biden-era crypto enforcement.
The Legal Landscape: Presidential Pardons and Financial Crime
To evaluate the significance of a potential Zhao pardon requires understanding the constitutional framework that gives presidents nearly unlimited power to grant clemency in federal criminal cases.
Article II, Section 2 of the U.S. Constitution grants the president the power "to grant Reprieves and Pardons for Offenses against the United States, except in Cases of Impeachment." This power is essentially absolute when it comes to federal crimes, with almost no restrictions on the president's discretion. Congress cannot overturn a presidential pardon, and courts have consistently held that the pardon power is not subject to judicial review.
A presidential pardon has several legal effects. It eliminates the convicted person's guilt in the eyes of the law, restores civil rights that may have been forfeited (such as the right to vote or own firearms), and can eliminate or reduce criminal penalties. However, a pardon does not erase the underlying conviction from someone's record, and it does not prevent civil lawsuits or other non-criminal consequences.
In Zhao's case, a pardon would eliminate his four-month prison sentence (already served), wipe out the $50 million fine (which remains outstanding), and potentially remove the three-year management ban that prohibits him from involvement in Binance's operations. It would restore his legal status to that of someone who had never been convicted.
The pardon would not, however, affect Binance's separate criminal convictions, its $4.3 billion settlement with the U.S. government, or its ongoing obligation to maintain an independent compliance monitor for three years. Those penalties were imposed on the corporate entity, not on Zhao personally.
Historical Context: Presidential Pardons in Financial Crime Cases
Presidents have historically used the pardon power sparingly in cases involving significant financial crimes, particularly those involving executives of major companies. The concerns are multiple: pardoning white-collar criminals can appear to favor wealthy and politically connected individuals, undermine public confidence in equal justice under law, and send a message that corporate misconduct carries minimal consequences.
However, there are notable exceptions. President Bill Clinton's final-day pardon of financier Marc Rich in 2001 remains one of the most controversial clemency decisions in modern history. Rich, who had fled to Switzerland to avoid prosecution for tax evasion, wire fraud, and illegal oil trading with Iran, received a pardon after extensive lobbying efforts that included significant donations to Clinton's presidential library and the Democratic Party. The pardon generated bipartisan outrage and prompted investigations into whether it had been purchased.
President George W. Bush commuted the sentence of I. Lewis "Scooter" Libby, his vice president's chief of staff, who had been convicted of perjury and obstruction of justice in connection with the leak of a CIA officer's identity. President Trump later granted Libby a full pardon.
Trump's own pardon record during his first term included several white-collar criminals and political allies. He pardoned or commuted sentences for individuals convicted of fraud, embezzlement, and financial crimes, often at the urging of prominent supporters or family members. His final-day pardons in January 2021 included Steve Bannon, his former chief strategist, who faced fraud charges related to a fundraising scheme (though those charges were later revived at the state level).
In his second term, Trump has shown even more willingness to use the pardon power for financial crimes, particularly in the crypto space. The BitMEX pardons in March 2025 represented a significant expansion of this approach, wiping out not just individual convictions but also a corporate criminal conviction and a $100 million fine.
Binance After Zhao: Life Under the Monitor
While the pardon debate continues, Binance itself has been operating under intense scrutiny from its court-appointed compliance monitor, a figure with extraordinary powers to examine and influence the exchange's operations.
The monitor, appointed as part of Binance's November 2023 settlement, reports directly to the U.S. Department of Justice and has broad authority to review Binance's anti-money laundering programs, sanctions compliance, transaction monitoring, and overall risk management. The monitor can require Binance to make changes to its systems, procedures, or personnel, and can report any deficiencies or violations to federal prosecutors.
For a company accustomed to moving fast and operating with minimal regulatory oversight, the presence of a compliance monitor represents a fundamental shift in culture. Every major business decision must now be vetted for compliance implications. Every new market or product launch requires careful analysis of regulatory requirements. The "move fast and break things" ethos that characterized Binance's rise is no longer an option.
Under Richard Teng's leadership as CEO, Binance has publicly committed to a new compliance-first approach. The exchange has hired former regulators and law enforcement officials for senior positions, invested hundreds of millions of dollars in compliance infrastructure, and implemented more robust know-your-customer and anti-money laundering procedures.
But questions remain about whether these changes are genuine cultural shifts or merely window dressing designed to satisfy the monitor. Critics point to continued concerns about Binance's operations in various jurisdictions, its ongoing litigation with the Securities and Exchange Commission, and its willingness to partner with entities like MGX on deals that appear designed primarily to curry favor with politically connected families.
The Securities and Exchange Commission's case against Binance, separate from the criminal settlement, alleges that the exchange operated as an unregistered securities exchange and mishandled customer funds. While the SEC under Trump's appointees paused this litigation in February 2025, agreeing to a 60-day stay to explore settlement options, the case remains unresolved. Some observers speculate that a Zhao pardon could influence negotiations over the SEC case, potentially giving Binance more leverage to secure favorable terms.
Democratic senators have warned that any weakening of Binance's compliance monitoring or early termination of the three-year monitoring period would undermine the Justice Department's settlement and could indicate improper influence. They have urged Attorney General Pam Bondi and other officials to maintain strict oversight regardless of any pardon granted to Zhao personally.
Market Reactions and Geopolitical Fallout
The cryptocurrency market's response to news of possible Zhao pardon discussions was complicated by simultaneous geopolitical tensions that dwarfed any single regulatory decision.
When Charles Gasparino reported on October 10 that White House discussions about pardoning Zhao were "heating up," the immediate market reaction was muted. On prediction markets like Polymarket, odds of Zhao receiving a pardon had fluctuated throughout 2025, ranging from 35 percent to 64 percent at various points. By October, many traders had already priced in a reasonable probability of clemency.
However, just hours after the pardon news broke, President Trump announced plans to impose an additional 100 percent tariff on Chinese imports, escalating a trade war that had already rattled global markets. The crypto market, which often moves in tandem with other risk assets during periods of heightened geopolitical stress, entered a violent downward spiral.
Bitcoin, which had reached an all-time high of $126,000 in early October, plunged below $110,000, falling more than 12 percent in 24 hours. Ethereum dropped 15 percent. Alternative cryptocurrencies experienced even steeper declines, with some major tokens falling 20 to 30 percent. The total crypto market capitalization shed hundreds of billions of dollars in value.
Most dramatically, the liquidation cascade that followed represented the single largest deleveraging event in cryptocurrency history. Over $19 billion in long positions (bets that prices would rise) were forcibly closed as prices fell through key support levels, triggering margin calls and automated liquidations. For context, the COVID-19 market crash in March 2020 saw about $1.2 billion in crypto liquidations, while the FTX collapse in November 2022 resulted in approximately $1.6 billion. The October 2025 liquidations were roughly 16 times larger than FTX, a previously unprecedented disaster.
It was difficult to separate cause from effect. How much of the crash was due to Trump's tariff announcement? How much reflected broader concerns about U.S.-China tensions? And how much, if any, stemmed from worries about crypto regulatory uncertainty and the precedent-setting implications of a Zhao pardon?
Most analysts attributed the crash primarily to the tariff news and its implications for global economic growth, risk asset valuations, and capital flows. But beneath the surface, the possibility of a Zhao pardon added to a narrative of uncertainty that has plagued crypto markets throughout 2025.
The China Factor
The timing of the tariff announcement and pardon discussions was not coincidental. U.S.-China relations have been central to Trump's second term, with the president pursuing an aggressive trade policy aimed at reshaping the bilateral economic relationship. The 100 percent tariff announcement came in response to Chinese export controls on rare earth minerals, escalating a tit-for-tat dynamic that has roiled markets and raised fears of a full-scale trade war.
Changpeng Zhao, though Canadian by citizenship, has extensive ties to China, where he spent part of his childhood and began his career in finance. Binance's early operations had significant presence in Asia, and the exchange has maintained relationships with Chinese crypto traders even after China banned cryptocurrency trading in 2021.
Some observers see a potential Zhao pardon as part of Trump's broader China strategy, either as a gesture of goodwill or as leverage in negotiations. Others view it more cynically, as an example of personal business interests (the USD1-Binance relationship) overriding strategic considerations.
The geopolitical dimension adds complexity to an already fraught decision. A pardon might be interpreted by Chinese authorities as the United States playing favorites with crypto executives who have Chinese connections, potentially complicating diplomatic efforts. Conversely, maintaining Zhao's conviction could be seen as anti-China bias, targeting successful business people of Chinese heritage more aggressively than their Western counterparts.
Industry Implications: What a Pardon Would Mean for Crypto
For the cryptocurrency industry, the question of whether Trump pardons Changpeng Zhao carries implications far beyond one man's legal status. It speaks to fundamental questions about accountability, the rule of law, and the relationship between innovation and regulation.
The Accountability Question
Crypto's decade-plus existence has been marked by repeated cycles of rapid growth followed by scandal and regulatory crackdown. From Mt. Gox to QuadrigaCX to FTX, the industry has produced numerous examples of exchanges that mishandled customer funds, engaged in fraud, or simply collapsed due to incompetence. In most of these cases, executives faced legal consequences, including prison time.
Sam Bankman-Fried, the founder of FTX who orchestrated one of the largest frauds in financial history, was convicted in November 2023 and sentenced to 25 years in prison. His case became a symbol of crypto's need for accountability, with prosecutors successfully arguing that fraud is fraud regardless of whether it involves cryptocurrency or traditional assets.
Zhao's case differed from Bankman-Fried's in significant ways. There were no allegations that Zhao personally stole customer funds or engaged in fraud. His crime was regulatory in nature: failing to maintain adequate systems to prevent money laundering. The $4.3 billion Binance paid represented the corporate penalty for those failures, not restitution to defrauded customers.
Yet prosecutors had argued that Zhao's violations were serious precisely because they involved the infrastructure of money laundering detection. By failing to implement proper controls, Binance allegedly enabled criminals, sanctions violators, and other bad actors to move money through the financial system. The harm was diffuse but potentially enormous.
A presidential pardon would effectively eliminate Zhao's personal accountability for these violations. His conviction would be erased, his fine eliminated, and his management ban lifted. He could return to full participation in Binance's operations, resume his position as the face of the exchange, and continue building his crypto empire without the shadow of a criminal record.
For critics, this outcome would send a troubling message: that even in cases involving admitted violations of anti-money laundering laws, well-connected executives can escape meaningful consequences if they have the right political relationships and business deals with the president's family.
For supporters, it would represent a correction of what they see as prosecutorial overreach, acknowledging that Binance and Zhao paid enormous penalties, cooperated with authorities, and implemented reforms that make them safer than many of their competitors.
The Regulatory Precedent
The crypto industry has long complained about regulatory uncertainty in the United States. Companies argue they want to follow the rules but often struggle to understand what those rules are, particularly when different agencies take conflicting positions or apply decades-old laws to cutting-edge technology.
Trump's election and his subsequent policy decisions have represented an attempt to provide the clarity the industry seeks. The executive orders, the Strategic Bitcoin Reserve, the appointment of crypto-friendly regulators, and the push for comprehensive stablecoin legislation all aim to create a framework in which innovation can flourish under clear rules.
But a Zhao pardon complicates this narrative. If following the rules means implementing robust anti-money laundering programs and cooperating with law enforcement to detect financial crime, what does it mean when someone who admittedly failed to do those things receives a pardon? Does it suggest that the rules are negotiable? That political connections matter more than compliance?
The crypto industry itself is divided on this question. Some executives and investors see a Zhao pardon as positive for the industry, removing what they view as the stigma of an unjust prosecution and signaling that Trump will protect crypto entrepreneurs from aggressive enforcement. Others worry it will reinforce negative stereotypes about cryptocurrency as a haven for those seeking to evade rules, undermining efforts to bring institutional investors and mainstream adoption.
There are also questions about how other countries will interpret a Zhao pardon. International cooperation on anti-money laundering enforcement depends on shared standards and consistent application. If the United States pardons a high-profile money laundering case for seemingly political reasons, it could complicate efforts to pursue cross-border financial crimes and undermine U.S. credibility when urging other nations to strengthen their own controls.
The Succession Question
Beyond the symbolic and regulatory implications, a pardon would have practical effects on Binance's future. Zhao remains the exchange's largest shareholder despite having stepped down as CEO. His estimated stake in Binance and holdings of BNB token make him one of the wealthiest people in the cryptocurrency industry.
Current restrictions prohibit Zhao from managing Binance or having operational involvement for three years. If those restrictions were lifted by a pardon, he could theoretically return to an active role at the company. Whether he would actually do so is unclear, given his statements suggesting he wants to focus on other ventures, including education and investments in crypto-related startups.
But even without formal operational control, Zhao's influence over Binance would be substantial if his legal troubles were resolved. He would be free to advocate publicly for the company, engage with regulators on its behalf, and leverage his relationships with governments and institutional investors. The three years during which Richard Teng has been building his own leadership credibility would give way to renewed questions about who really runs Binance.
For Binance's competitors, a Zhao pardon represents both a threat and an opportunity. It would restore to active participation one of the most effective entrepreneurs in crypto history, someone who built a dominant exchange by moving faster and taking more risks than cautious competitors. But it would also highlight the degree to which Binance's success has been tied to relationships with the Trump administration and political deal-making rather than superior products or compliance.
Expert Perspectives: Legal and Policy Analysis
Legal scholars and policy experts who study presidential pardons and financial regulation have offered mixed views on the prospect of a Zhao pardon.
Some constitutional law professors note that while the pardon power is nearly absolute, its use in cases involving clear conflicts of interest raises serious ethical concerns even if legally permissible. If Trump pardons someone whose company is engaged in multibillion-dollar deals that benefit Trump family businesses, they argue, it creates at minimum the appearance of corruption and potentially violates the emoluments clause's spirit, if not its letter.
Former federal prosecutors point out that the Justice Department's case against Zhao was solid, based on his own admissions and supported by extensive evidence of Binance's compliance failures. Unlike some controversial prosecutions where the underlying conduct is debatable, Zhao pleaded guilty to clear violations of well-established law. Pardoning him would not be correcting a miscarriage of justice but rather eliminating consequences for admitted criminal conduct.
Former regulators emphasize the message a pardon would send to other cryptocurrency exchanges and financial institutions. If even after paying billions in penalties and serving prison time, a well-connected executive can have his conviction erased, what incentive do others have to prioritize compliance over growth? The deterrent effect of the Binance prosecution would be substantially undermined.
Crypto industry advocates offer a different perspective. They point to the fact that Zhao's case involved a charge rarely prosecuted as a standalone crime. The Bank Secrecy Act violations were not accompanied by allegations of fraud, theft, or direct participation in money laundering. Compared to cases like FTX, where customers lost billions to outright fraud, or Silk Road, which facilitated serious criminal activity, Zhao's offense was primarily regulatory in nature.
They also argue that the $4.3 billion corporate penalty plus Zhao's personal fine and prison time already represent substantial punishment. The question is not whether there should be consequences but whether those consequences are proportionate and whether additional deterrence through maintaining a criminal conviction serves any purpose.
National security experts raise concerns about the international implications. Binance processed transactions for users in sanctioned jurisdictions, potentially undermining U.S. foreign policy objectives and sanctions enforcement. Pardoning the executive responsible for those compliance failures could signal to foreign adversaries that the United States is not serious about enforcing its own sanctions regime, particularly when business interests are involved.
Ethics watchdogs focus on the process by which pardon decisions are made. Traditionally, the Justice Department's Office of the Pardon Attorney reviews clemency applications, conducting investigations and making recommendations. Trump has often bypassed this process, granting pardons based on personal relationships, lobbying by friends and allies, or political considerations. If Zhao's pardon is granted without proper review, it would continue this pattern and further erode norms around the use of executive clemency.
Looking Ahead: Possible Outcomes and Their Consequences
As of mid-October 2025, several scenarios remain possible regarding Changpeng Zhao's pardon application.
Scenario One: Full Pardon Granted Soon
If Trump grants a full and unconditional pardon to Zhao in the near term, the immediate effects would be dramatic. Zhao's criminal conviction would be erased, his $50 million fine eliminated, and his management ban lifted. He could immediately resume any level of involvement with Binance he chose, potentially returning as an advisor or even board member if the company's corporate governance allowed.
The crypto market would likely respond positively in the short term, viewing the pardon as confirmation that the Trump administration is serious about supporting the industry and willing to revisit what many in crypto see as Biden-era overreach. Bitcoin and other major cryptocurrencies might rally on the news, particularly if the pardon were coupled with additional pro-crypto policy announcements.
But the medium-term consequences could be more mixed. Democratic members of Congress would likely launch investigations into the decision, demanding records about communications between Binance, the Trump family, and White House officials. New legislation could be introduced to restrict presidential pardon power in cases involving conflicts of interest, though such legislation would face significant constitutional hurdles.
International regulators might respond by tightening oversight of Binance in their jurisdictions, concerned that the exchange's relationship with the U.S. government is based on political connections rather than compliance improvements. This could complicate Binance's efforts to expand in major markets.
Scenario Two: Conditional Clemency or Delayed Decision
Trump might choose a middle path, either granting partial clemency (such as eliminating the fine but not the conviction) or deferring any decision until after the three-year compliance monitoring period ends. This approach would allow him to signal support for Zhao without immediately facing the political blowback of a full pardon during a period of intense scrutiny over Trump family business dealings.
A conditional approach might also include requirements that Zhao maintain distance from Binance's operations, continue cooperating with authorities, or meet certain compliance benchmarks. This would parallel some historical clemency grants where presidents imposed conditions to address concerns while still providing relief to the convicted individual.
This outcome would likely frustrate both Zhao's supporters (who want full vindication) and his critics (who see any clemency as inappropriate). The crypto market reaction would depend on specifics, but would probably be more muted than a full pardon.
Scenario Three: No Pardon
Trump could simply decline to grant a pardon, either explicitly or by allowing Zhao's application to languish indefinitely. This outcome might reflect concerns about political optics, resistance from Justice Department officials who worked on the case, or calculation that the controversy outweighs any benefits.
A denial would be a significant defeat for Zhao personally, leaving him with a criminal conviction and all its attendant consequences. For the crypto industry, it would send a message that even with a crypto-friendly administration, there are limits to how much prior enforcement actions will be revisited.
However, even without a pardon, Zhao's management ban will expire in November 2026 based on the three-year term from the November 2023 settlement. At that point, absent other restrictions, he would be free to resume involvement with Binance. The question is whether the conviction itself, which would remain on his record, would effectively bar him from certain activities or relationships.
Scenario Four: Post-Term Pardon
Trump could wait until late in his term, as many presidents do with controversial pardons, to grant clemency to Zhao. This approach would minimize immediate political fallout while still delivering on what some Trump advisors view as a commitment to the crypto industry.
Historically, presidents have often saved their most controversial pardons for the final days in office, when political consequences are minimized. Bill Clinton's pardon of Marc Rich came on his last day as president. Trump's first-term pardons of allies and supporters were concentrated in his final weeks.
A late-term Zhao pardon would be less explosive than an immediate one but would still raise the same fundamental questions about conflicts of interest and the proper use of executive clemency. It might be paired with pardons for other crypto figures, presented as part of a broader effort to correct what Trump characterizes as the Biden administration's anti-crypto enforcement.
The Broader Context: Crypto at a Crossroads
The question of whether to pardon Changpeng Zhao sits within a broader debate about cryptocurrency's future in the United States and globally.
After more than a decade of existence, digital assets remain controversial and polarizing. Proponents see transformative potential: technology that could democratize finance, provide banking services to the unbanked, enable programmable money, and create new forms of digital ownership and value transfer. Skeptics see primarily speculation, fraud, environmental damage from energy-intensive mining, and a technology used primarily for crime and sanctions evasion.
The truth, as often, lies somewhere between these extremes. Cryptocurrency has enabled both innovation and fraud, both financial inclusion and financial crime, both technological progress and speculative excess.
Trump's approach represents a bet that the United States should embrace crypto despite its risks, establishing clear rules while allowing innovation to flourish. This stands in stark contrast to approaches taken by some other major economies, particularly China, which has banned cryptocurrency trading and mining while developing its own government-controlled digital currency.
But Trump's approach faces a credibility problem if it appears that the rules apply differently depending on political connections and business relationships. The whole point of rule of law is that similar cases are treated similarly, regardless of who is involved. When a president pardons someone whose company pays millions to his family's businesses, it's hard to maintain that rules are being applied consistently.
This credibility challenge extends beyond Zhao's specific case. If the Trump administration appears to be operating a pay-to-play system where favorable regulatory treatment goes to companies that do business with Trump family ventures, it will undermine efforts to bring institutional capital and mainstream adoption to cryptocurrency. Traditional financial institutions and their compliance departments will be reluctant to enter a market that looks like it's driven by cronyism rather than transparent rules.
Conversely, if Trump can demonstrate that his crypto policies are based on principle rather than profit, if regulatory decisions are made on the merits rather than political considerations, and if enforcement is fair and consistent, the United States could genuinely become a leader in digital asset innovation while maintaining appropriate guardrails against crime and abuse.
The Zhao pardon decision, whenever it comes, will be seen as a test of which version of Trump's crypto policy is real.
Conclusion: High Stakes, Uncertain Outcome
As October 2025 draws to a close, Changpeng Zhao's fate remains uncertain. The man who built the world's largest cryptocurrency exchange sits in a kind of limbo, legally free but professionally restricted, waiting to learn whether the President of the United States will grant him clemency.
The decision, when it comes, will reverberate far beyond one individual's legal status. It will help define the Trump administration's approach to cryptocurrency, test the boundaries between public policy and private profit, and shape how the world understands America's commitment to rule of law in an age of digital finance.
For Trump, the calculation is complex. A pardon would delight many in the crypto industry, fulfill what some advisors see as a commitment to revisit Biden-era enforcement, and potentially benefit family businesses engaged with Binance. But it would also generate intense criticism, invite congressional investigations, and create a defining example of potential corruption that could haunt the administration.
For Zhao, the stakes are intensely personal. A pardon would restore his reputation, eliminate his criminal conviction, and allow him to fully resume the entrepreneurial activities he built his career on. Denial would leave him with the stigma of a felony conviction, however much he might argue the prosecution was unjust.
For the cryptocurrency industry, the decision will send a signal about what kind of accountability leaders face when they prioritize growth over compliance. It will influence how other countries view American crypto regulation and shape the industry's efforts to achieve mainstream legitimacy.
And for markets already battered by geopolitical tensions, regulatory uncertainty, and periodic crises of confidence, the pardon debate represents one more variable in a complex equation determining crypto's future trajectory.
The only certainty is that whatever Trump decides, it will be consequential, controversial, and closely watched by everyone with a stake in cryptocurrency's future. In an industry defined by volatility and uncertainty, perhaps that should come as no surprise.