What to Know:
- •Trump administration officials are discussing a potential pardon for former Binance CEO Changpeng Zhao, who was convicted in 2023 for failing to maintain adequate anti‑money laundering controls at the cryptocurrency exchange.
- •Zhao pleaded guilty as part of a settlement in which Binance paid more than $4.3 billion in penalties, one of the largest corporate fines in U.S. history, and he served a four‑month federal prison sentence before his release in 2024.
- •The pardon discussions come as cryptocurrency markets decline sharply following Trump's announcement of a planned 100 % tariff on Chinese goods, with Bitcoin falling to around $110,000 and the overall crypto market dropping 9.69 %.
White House Deliberations on Zhao's Conviction
Fox Business reporter Charles Gasparino reported Oct. 10 that White House officials had begun discussing a possible pardon for Zhao, who is commonly known as CZ in the cryptocurrency industry. Sources indicated that some members of Trump's team believe the fraud case against the businessman lacked strength.
They also view his felony conviction and imprisonment as disproportionate to the violations.
The Justice Department charged Zhao and Binance in 2023 with violating the Bank Secrecy Act. Prosecutors said the exchange failed to establish proper anti‑money laundering controls. Federal authorities accused Binance of allowing illicit funds to flow through its platform, including transactions connected to sanctioned countries and criminal organizations such as North Korea's Lazarus group.
Zhao pleaded guilty to one count of failing to maintain an effective anti‑money laundering program. He acknowledged that he did not implement adequate safeguards to prevent Binance from being used for illegal activities. The plea agreement was part of a broader settlement that required Binance to pay penalties exceeding $4.3 billion.
Background on the Binance Settlement
Under the terms of the settlement, Zhao resigned as Binance's chief executive in April 2024. He received a four‑month sentence in federal prison. Zhao temporarily gave up direct control of Binance following his conviction but maintains his ownership stake in the company.
A presidential pardon would effectively erase Zhao's criminal record and restore his legal standing. However, the former executive would likely remain removed from formal leadership at Binance due to the exchange's agreement with the Justice Department. That agreement places the company under the supervision of an independent compliance monitor for multiple years.
The compliance monitor's role is to ensure Binance implements and maintains proper anti‑money laundering procedures. This oversight was a critical component of the settlement between the exchange and federal prosecutors.
Market Turbulence and Geopolitical Tensions
The discussions about Zhao's potential pardon occur as cryptocurrency markets experience significant declines. Trump announced plans to impose a 100 % tariff on all Chinese imports, triggering widespread selling across digital asset markets. China had previously announced sweeping export controls on nearly all products beginning Nov. 1, 2025.
The crypto market has fallen 9.63 % to approximately $3.72 trillion in total value. Bitcoin, the largest cryptocurrency by market capitalization, declined 7.81 % to trade around $111,900.
Gasparino noted that any presidential pardon for Zhao may not be imminent. The White House is currently focused on managing international conflicts in Gaza and Ukraine. The escalating trade dispute with China also requires immediate attention from administration officials.
Understanding Key Financial Terms
The Bank Secrecy Act requires financial institutions to assist government agencies in detecting and preventing money laundering. Companies must implement anti‑money laundering programs that include customer identification procedures and suspicious activity reporting. Violations can result in criminal charges against both institutions and their executives.
Cryptocurrency exchanges face particular scrutiny under these regulations because digital assets can be transferred across borders quickly and with relative anonymity.
Federal prosecutors have increasingly targeted exchanges that fail to comply with anti‑money laundering requirements.
A presidential pardon is an executive action that forgives a federal crime and eliminates the associated penalties. The Constitution grants the president broad authority to issue pardons for federal offenses. However, a pardon does not affect civil penalties or regulatory obligations that may exist independently of criminal convictions.
Looking Forward
Trump's consideration of a pardon for Zhao represents a potential shift in how the administration approaches cryptocurrency regulation and enforcement. The outcome could influence how other cryptocurrency executives view their legal exposure under federal financial laws. Any decision on the pardon will likely depend on how the administration prioritizes competing domestic and international policy concerns.