In a dramatic turn of events for the cryptocurrency industry, Changpeng Zhao, widely known as CZ, the founder and former CEO of Binance, has been granted a full pardon by former U.S. President Donald Trump in October 2025. CZ had previously pleaded guilty to significant financial crimes, including failing to maintain an effective anti-money laundering program under the Bank Secrecy Act (BSA). This historic pardon has ignited widespread controversy, not only due to the severity of the charges but also because of the financial links between CZ, Binance, and the Trump family, particularly their shared involvement in cryptocurrency ventures.
Background of Binance and Changpeng Zhao
Founded in 2017 by Changpeng Zhao, Binance rapidly became the world’s largest cryptocurrency exchange by trading volume. Despite repeated regulatory warnings, the platform maintained a substantial user base in the United States, heavily focusing on high-volume “VIP” customers, which were critical for liquidity and revenue. Over its history, Binance facilitated hundreds of billions of dollars in transactions, generating more than $1.6 billion in profits and collecting $1.35 billion in fees from U.S. users. Binance also played a significant role in shaping the broader cryptocurrency market and indirectly exposed major scandals, including those surrounding FTX.
Allegations and Regulatory Violations
The legal actions against Binance and CZ stemmed from numerous allegations of regulatory and operational misconduct. Key regulatory violations included failures under the Bank Secrecy Act due to ineffective anti-money laundering controls, operating without proper registration as a money transmitting business, and violating the International Emergency Economic Powers Act by allowing transactions with users in sanctioned countries. Operationally, Binance prioritized growth and profit over compliance with U.S. law, permitted U.S. users to trade on the platform despite restrictions, and maintained substantial U.S. VIP accounts through offshore accounts to bypass U.S. regulations. The company actively encouraged users to provide misleading information about their locations to evade compliance measures.
Binance’s AML and KYC protocols were significantly deficient. The platform did not systematically monitor transactions for suspicious activity, failed to file required Suspicious Activity Reports (SARs) with FinCEN, and allowed accounts to operate with minimal identification information until 2022. Internal documents recognized that these failures made Binance attractive to illicit actors, and the platform was subsequently used for ransomware proceeds transfers, darknet marketplace transactions, exchange hacks, and other internet-related scams. Notably, transactions with users in sanctioned jurisdictions, including Iran, Cuba, Syria, and Russian-occupied Ukraine, led to over $898 million in unlawful trades with U.S. users.
CZ’s Personal Accountability and Guilty Plea
Changpeng Zhao admitted to knowing that U.S. users were critical to Binance’s growth and revenue and deliberately prioritized expansion over legal compliance, famously adopting a philosophy of “better to ask for forgiveness than permission.” This approach directly caused foreseeable illegal transactions due to the lack of robust AML and KYC measures. CZ pleaded guilty to failing to maintain an effective AML program, received a four-month prison sentence in May 2024, and personally paid $50 million in fines.
Binance Settlement and Government Response
Binance reached a landmark settlement with U.S. authorities, agreeing to pay over $4.3 billion in total penalties. This included $2.51 billion in forfeiture and $1.81 billion in criminal fines, alongside the requirement to retain an independent compliance monitor for three years and enhance its AML and sanctions compliance programs. The resolutions were coordinated across the Department of Justice, the Commodity Futures Trading Commission, FinCEN, and OFAC. U.S. officials highlighted the severity of Binance’s violations, emphasizing the facilitation of criminal and illicit activities, threats to national security, and a corporate culture that prioritized profit over compliance.
Trump Pardon and Its Controversy
In October 2025, former President Donald Trump issued a full pardon for CZ, arguing that the Binance CEO had been “overly prosecuted” under the Biden administration. Trump cited advice from his supporters, claiming that CZ “was persecuted” and that his case “was not even a crime.” The pardon allows the possibility for Binance to operate in the United States once again.
The pardon has sparked controversy due to financial ties between CZ and the Trump family’s cryptocurrency venture, World Liberty Financial, which Binance hosted. The platform also supported proprietary tokens linked to Trump’s stablecoin, USD1, facilitating $2 billion in investments. Critics, including Senator Elizabeth Warren, have decried the pardon as a potential case of political corruption and favoritism, suggesting it may reward financial backing and lobbying efforts.
CZ’s Response and Industry Implications
CZ publicly thanked Trump following the pardon and pledged to make America the “Capital of Crypto” while advancing web3 technologies globally. While he denied direct involvement in financing Trump’s stablecoin, he acknowledged providing technical support through Binance. The pardon has divided political and industry opinion, with Democrats emphasizing corruption concerns, while crypto advocates view it as a potential turning point for fairer regulatory treatment of the cryptocurrency industry. The pardon also aligns with a broader Trump-era crypto agenda, following similar clemencies for figures like Ross Ulbricht and the BitMEX co-founders.
Irony and Broader Context
The unfolding saga highlights the volatility and regulatory challenges of the cryptocurrency sector. Ironically, Binance and CZ, who were once central figures in exposing crypto scandals such as FTX, have themselves become central actors in one of the largest corporate criminal resolutions in U.S. history. The pardoning of CZ underscores both the continuing influence of political relationships in the cryptocurrency industry and the complexities of enforcing compliance in a global, high-volume digital market.
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