60 Minutes<\/em><\/a> in an interview that aired on November 2. \u201cI can only tell you this. My sons are into [crypto],\u201d he said later in the interview.<\/p>\nZhao\u2019s legal representatives and industry allies have defended the pardon as a rightful corrective. \u201cCZ is the first and only known first-time offender in US history to receive a prison sentence for this single, non-fraud-related charge,\u201d wrote Teresa Goody Guill\u00e9n, partner at law firm Baker & Hostetler, which represents Zhao, in a post on X.<\/p>\n
As a result of the alleged appearance of nepotism, cronyism, and self-dealing in Trump\u2019s crypto activities, members of the industry\u2014which spent hundreds of millions of dollars supporting pro-crypto candidates in 2024 congressional races\u2014are bracing for a retaliation by a future Democratic regime. Though the industry has won new laws specific to stablecoins during the Trump administration, some believe the window to pass broad-based crypto legislation is already closing.<\/p>\n
\u201cThe [pardon] doesn\u2019t look good,\u201d claims Azeem Khan, founder of crypto startup Miden. \u201cThere\u2019s going to be scorched earth to come with the midterm elections. There\u2019s not enough being codified into law yet.\u201d<\/p>\n
\u201cOn balance, obviously the Trump admin has been good for crypto. There\u2019s no denying that,\u201d claims Nic Carter, general partner at crypto-focused VC firm Castle Island Ventures. But Trump \u201cdoesn\u2019t care about the appearance of impropriety\u2014at all,\u201d Carter says. \u201cHis sons have been so active in the crypto industry. This has been my main complaint about the Trump administration.\u201d<\/p>\n
\u201cNeither the president nor his family have ever engaged, or will ever engage, in conflicts of interest,\u201d said White House press secretary Karoline Leavitt in a statement.<\/p>\n
In the meantime, Zhao\u2019s pardon could have a destabilizing effect on US-based crypto exchanges, for whom Binance now represents a latent threat. Their market has already been eroded by the arrival of crypto exchange-traded funds that allow people to invest in crypto through traditional brokerages.<\/p>\n
In a strictly legal sense, the pardon changes little; both Zhao and Binance are still bound by the plea agreements, which prevent the founder from returning to an active role at Binance and prohibit the company from operating in the US, says Daniel Silva, partner at law firm Buchalter.<\/p>\n
Equally, while Zhao\u2019s criminal record has been erased, his testimony has not. \u201cHe still admitted to all those things under penalty of perjury,\u201d says Silva. \u201cWhile he\u2019s no longer technically a felon, that doesn\u2019t negate the admissions that he made.\u201d Prospective business partners will still take those admissions into consideration, he says.<\/p>\n
But the pardon opens the door for the US government to formally release Zhao and Binance from their obligations, claims Silva. Meanwhile, faced with a US Department of Justice that has abdicated responsibility for policing certain crypto-related crimes, Zhao may feel emboldened to return to an active role at Binance either way. \u201cYou can breach any contract you want. The question is what consequences will there be?\u201d says Silva.<\/p>\n
Binance and Zhao did not respond to requests for comment. But in an X post thanking Trump for the pardon, Zhao wrote, \u201cWill do everything we can to help make America the Capital of Crypto.\u201d Earlier in the year, The Wall Street Journal noted, Zhao quietly changed his biography on X, swapping \u201cex-binance\u201d for just \u201cbinance.\u201d<\/p>\n
The US crypto exchange market is dominated by Coinbase, which has long pitched itself as the straightlaced, law-abiding alternative to freewheeling international counterparts. But Binance is the largest crypto exchange in the world, processing around $22 billion in trades each day, almost eight times more than Coinbase.<\/p>\n
The systemic importance of Binance to crypto markets is generally underappreciated in the US, some claim. \u201cThere\u2019s an ethnocentrism people in North America have about being the best,\u201d claims Khan. \u201cCoinbase is in many ways the<\/em> company. But Binance is the<\/em> company for the rest of the world.\u201d<\/p>\nWith its immense financial resources, Binance could squeeze the margins of smaller US-based competitors who cannot afford to pursue loss-leading strategies for attracting customers\u2014like slashing trading fees.<\/p>\n
To gird itself against heightened competition, Coinbase has set out on a shopping spree. In the past year, Coinbase has acquired a derivatives exchange, an angel investment platform, and a service for launching crypto tokens, and it has partnered with PayPal and American Express on new services. The effect is to erect a walled garden of sorts, says Khan, that incentivizes customers to remain within Coinbase\u2019s orbit and diversifies revenues away from trading fees. \u201cCompetition is coming. I think that\u2019s why Coinbase has been so aggressive for some time now,\u201d says Khan.<\/p>\n
Coinbase declined to be interviewed for this story.<\/p>\n
The US exchange market will ultimately trend toward consolidation, experts predict. \u201cFees get squeezed, and you have to scale to win,\u201d says Chris Perkins, partner at crypto venture capital firm CoinFund. \u201cThere\u2019s going to be some holy or unholy alliances.\u201d<\/p>\n
Though Trump\u2019s far more permissive stance towards crypto stands to lift the entire industry, some are concerned by the administration\u2019s ability to essentially select winners and losers\u2014by effecting specific policy changes or pardoning founders, say.<\/p>\n
\u201cYou want to win, but you want to win in a legitimate way,\u201d claims Carter. \u201cYou don\u2019t want your wins to be tinged by the appearance of corruption. You want to operate in a market economy, not a command-and-control economy where your ability to penetrate Washington determines whether you win or not.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Save StorySave this storySave StorySave this story Changpeng Zhao, the multibillionaire founder of crypto exchange Binance, spent four months last year locked in a federal prison. After US president Donald Trump pardoned Zhao in October, the government has recast him as a martyr. Zhao, who goes by CZ, pleaded guilty in November 2023 to failing […]<\/p>\n","protected":false},"author":1,"featured_media":37596,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-37595","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/37595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=37595"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/37595\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/37596"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=37595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=37595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=37595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}