White House Defends Pardon of Binance Co-Founder Changpeng Zhao
The Trump administration caused controversy by defending its pardon of Binance Co-Founder Changpeng Zhao (CZ). The pardon was announced shortly after Trump denied knowing Zhao.
White House Press Secretary Karoline Leavitt said the pardon shows Trump’s commitment to fair crypto policies. She criticized the previous administration for harshly prosecuting crypto figures. Leavitt stated, “The judge in his case said the sentencing was egregious and went too far.”
CZ pleaded guilty to compliance violations and served a four-month prison sentence. Critics say the pardon undermines crypto regulation. Supporters view it as a win for innovation and financial inclusion.
Trump Distances Himself From CZ Amid Backlash
Despite the White House’s defense, Trump publicly distanced himself from Zhao. In a recent interview, Trump said, “I don’t know who he is. I know he got a four-month sentence. And I heard it was a Biden witch hunt.”
Observers note the contradiction between Trump’s denial and his administration’s decision to pardon Zhao. The issue has intensified political tensions during the ongoing government shutdown.
Government Shutdown and Political Tensions Affect Crypto
The pardon came as the U.S. government entered its 35th day of shutdown, the longest in history. Federal agencies remain closed due to a funding dispute between the White House and congressional Democrats.
Since October 1, the government has borrowed over $600 billion in loans. Market analysts say the shutdown has increased volatility in both traditional and crypto markets.
Coinbase Rejects Accusations of Favoritism
Senator Chris Murphy accused Coinbase of benefiting from Trump favoritism, linking political donations to the SEC dropping its lawsuit against Coinbase.
Coinbase’s Chief Policy Officer Faryar Shirzad dismissed the claims as “ridiculous.” He said the donations were made through a bipartisan PAC. Shirzad called the SEC’s decision “the right decision on the merits.”
Binance.US Denies Payback Claims Over USD1 Stablecoin Listing
Binance.US faced allegations that its listing of USD1, a stablecoin issued by Trump-linked World Liberty Financial, was linked to CZ’s pardon.
Binance.US responded that the listing was a prior business decision. The exchange noted USD1 and WLFI tokens are also listed on Coinbase, Kraken, and Robinhood.
Lawmakers Call for Crypto Ethics Reform
Controversy has prompted new ethics reform proposals. Representative Ro Khanna plans to introduce a resolution banning top U.S. officials and their families from trading cryptocurrencies or stocks. The aim is to reduce conflicts of interest and restore trust.
The proposal follows criticism accusing some lawmakers of rewarding crypto criminals through political favors.
Impact on U.S. Crypto Policy
The pardon is seen as a political statement signaling a new era for crypto in America. Supporters highlight digital innovation and privatization. Critics warn it may weaken enforcement and encourage bad actors.
As Trump promotes himself as the most pro-crypto president, U.S. policy remains deeply divided. The future impact depends on balancing innovation with regulatory accountability.
