The strategic maneuvers of Changpeng Zhao (CZ) were pivotal in propelling cryptocurrencies to reach millions globally. During a time when regulations were undefined, he seized the gray areas as opportunities, expanding Binance Global worldwide. Following the 2022 collapse of FTX, CZ found himself targeted by U.S. Democrats which led to Binance and CZ facing various sanctions and penalties. Ultimately, CZ was pardoned. But what lies behind this outcome?
CZ and Bribery Allegations
The surge in the crypto market during Trump’s tenure, which led to a significant financial gain for the former president, increased the ire of the Democrats. CZ’s recent pardon brought to light allegations of bribery linked to Trump’s crypto dealings with the Binance exchange.
CZ’s attorney denied claims that he paid money for his pardon in October. Speaking on a podcast, lawyer Teresa Goody Guillen stated, “I know that would never happen; he’s not that kind of person.”
U.S. Senator Elizabeth Warren has been a catalyst for the growing animosity among Democrats towards cryptocurrencies post-FTX collapse, and she was the one to bring up the bribery allegations against Binance’s founder. Last month, she emphasized that Congress should halt such corrupt practices; otherwise, it must bear full responsibility.
Binance-Trump Connection
In 2023, CZ admitted to violating banking secrecy laws, acknowledging that the global expansion strategy involved leveraging gray areas. This acknowledgment marked a turning point for Binance as CZ asserted that they would adopt a proactive approach towards regulations, leading to the employment of hundreds of compliance and regulatory staff monthly.
Yet, Binance needed to admit non-compliance with some AML/KYC protocols to turn a new page. Accepting his guilt in this affair, Zhao stepped down as CEO, agreeing never to return, in line with U.S. demands. Subsequently, CZ accepted a $50 million and prison sentence while Binance paid a record $4.3 billion fine.
What’s the connection between Binance and Trump? Initially, DT Marks DEFI LLC, owned by the Trump family, held 75% of World Liberty’s shares, currently reduced to 38%. The Trump entity holds 22.5 billion WLFI, with 75% of the proceeds from token sales flowing to them. This is where Binance entered the picture. World Liberty’s stablecoin USD1 was launched, with Bloomberg claiming that Binance authored the stablecoin contract. Binance, denying this claim, announced potential legal action over the allegation.
Subsequently, the UAE-backed investment firm MGX declared its intention to acquire $2 billion worth of shares in Binance, making the payment in USD1. This was seen as a move to bolster the WLFI ecosystem and benefit Trump.
Goody Guillen remarked that numerous lies and incorrect statements about the World Liberty-Binance relationship were circulating, unrelated to the facts.