When US President Donald Trump pardoned Changpeng Zhao, better known as CZ, the crypto industry held its breath. Less than two years ago, the Binance founder had pleaded guilty to failing to maintain an effective anti-money-laundering program. Binance was fined $4.3 billion, forced to leave the US, and placed under a compliance monitor.
Now the man once portrayed as crypto’s outlaw has been recast as a martyr. Trump called him a victim of the previous administration’s “war on crypto.” Zhao’s record is clean again, but the industry is anything but calm.
The pardon, announced in late October, may reshape the balance of power across the US crypto market. With Binance barred from operating in the country, legal experts say the decision could set off a wave of lobbying and regulatory uncertainty. The question is whether the world’s largest exchange will try to come back and what that means for the companies that never left.
What makes this pardon explosive is not only Zhao’s return but the network around him. Binance has ties to World Liberty Financial, a crypto firm co-founded by Trump’s sons. Through an investment deal earlier this year, Binance agreed to take a $2 billion stake denominated in USD1, a coin issued by the Trump family’s company. The arrangement could earn millions in token revenue. That connection has left the industry uneasy, with talk of nepotism and self-dealing flooding crypto forums.
Trump, when asked about Zhao, brushed it off. “I do not know who he is,” he said in a 60 Minutes interview, adding only that his sons are “into crypto.”
For supporters, the pardon corrects what they see as political targeting. Teresa Goody Guillén, a partner at Baker and Hostetler, called Zhao’s sentence unprecedented, noting he was a first-time offender who never committed fraud. But even allies admit the move has blurred the line between policy and personal interest.
Some industry voices are already warning of long-term consequences. Azeem Khan, founder of Miden, called the pardon “a spark for scorched earth.” Others, like venture capitalist Nic Carter, said Trump’s actions confirm a pattern. “He does not care about the appearance of impropriety at all,” Carter said. “His sons have been so active in crypto. It makes everything murkier.”
Inside Washington, that murkiness matters. The industry spent hundreds of millions backing pro-crypto candidates in the 2024 elections. Now, with the political tide shifting, many fear a backlash when power changes hands. Stablecoin laws have passed, but broader blockchain regulation may now stall indefinitely.
For US-based exchanges, the threat is also practical. If Binance reenters the market, it could undercut competitors like Coinbase by slashing fees and absorbing losses to gain users. Coinbase has spent the last year diversifying its business, acquiring derivatives platforms and forging deals with PayPal and American Express to build an ecosystem that locks customers in. “Competition is coming,” Khan said. “That is why Coinbase has been so aggressive.”
The irony is that, legally speaking, the pardon changes little. Zhao and Binance are still bound by the plea agreements that ban them from operating in the US. His admissions remain on record. But perception is power and perception in crypto moves markets faster than regulation ever can.
Zhao seems to understand this. In a post on X, he thanked Trump and wrote, “We will do everything we can to help make America the capital of crypto.” Shortly afterward, he quietly changed his bio, removing “ex-binance” from his profile.
Binance still processes over $20 billion in trades each day, nearly eight times more than Coinbase. Its return to the US, even symbolically, could redraw the global crypto map. For now, the blockchain world stands divided: part celebration, part disbelief, and part fear that the same forces that built crypto’s freedom might end up capturing it.
Read the original coverage at WIRED
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