Key insight: Lawmakers suggest a sequence of deals and cryptocurrency related business ties to Trump and his allies raise the appearance of a quid-pro-quo.
Expert quote: “After Mr. Zhao’s company provided President Trump and his family with a revenue stream worth millions of dollars, President Trump pardoned him for criminal activity that he admitted to conducting,” the Senators wrote.
Forward look:The Senator demand answers from the administration at a time when it is considering offering banking charters to a number of fintechs engaged in cryptocurrency.
Democratic Senators demanded answers from the Treasury Secretary and Attorney General Tuesday following President Trump’s pardon of former Binance CEO Changpeng Zhao.
In the letter, signed by Senators Merkeley, Reed, Blumenthal, Sanders, Hirono, Van Hollen and led by Elizabeth Warren, the lawmakers cited the Trump family’s financial interest in cryptocurrency leading up to the the pardon, which they say communicates to cryptocurrency executives and other white collar criminals that immunity can be purchased.
“After Mr. Zhao’s company provided President Trump and his family with a revenue stream worth millions of dollars, President Trump pardoned him for criminal activity that he admitted to conducting,” the Senators wrote. “It appears that corporate criminals can violate the law, be found guilty, and face criminal consequences — but if they or other executives help the President enough, they can be cleared of wrongdoing.”
The Department of Justice came to a $4 billion settlement with Binance in November 2023 regarding allegations of enabling illicit finance including transactions with terrorists, criminals and sanctioned parties. Zhao pleaded guilty at the time and was sentenced to four months in prison, a warning to other executives, according to the lawmakers, that was undercut since Trump’s return to office.
“It signaled to the American public that the government was working for them, not just the rich and powerful,” lawmakers wrote. “But since President Trump’s presidential campaign kicked into high-gear, Binance and Mr. Zhao began cozying up to the President and his family through a series of financial deals.”
President Trump, his sons and associate Steve Witkoff started a cryptocurrency company World Liberty Financial in September 2024 leading up to the election. After Trump’s victory in December 2024, Witkoff and Zhao met at a middle-eastern bitcoin conference, according to the lawmakers. WLF reportedly floated the idea of creating a stablecoin with Binance in March, and later WLF issued a stablecoin, with Binance “wr[iting] the basic code to power” the asset. A Witkoff-affiliated Emirati firm MGX later invested over $2 billion in the form of Trump’s stablecoin USD1 to invest in Binance, enriching the Trump family. In the months following Zhao applied for, and later received a pardon in October.
The lawmakers say the sequence of events suggest a quid-pro-quo that undermines law enforcement the Treasury and Justice Departments are tasked with executing.
“There is little question that Mr. Trump’s pardon may make your jobs more difficult,” the lawmakers wrote. “Mr. Trump’s pardon publicly and flagrantly undermines the work of the federal law enforcement teams that spent years investigating and prosecuting Binance’s offenses.”
They requested answers to a series of questions by November 4, including as to what the effects of the pardon are on law enforcement viability, the impunity of cryptocurrency actors, the appearance of conflicts of interest in government and whether such appearances led to the pardon.
The discourse comes at a time when the cryptocurrency industry is making inroads into establishment banking. A number of crypto firms are seeking national trust charters from the Office of the Comptroller of the Currency, just weeks after stablecoin issuer and exchange Coinbase’s