How a Billionaire Felon Boosted Trump’s Crypto Company en Route to a Pardon

S E E D E D   C O N T E N T

ABU DHABI—Changpeng Zhao, crypto’s richest man, flew home from a California jail a year ago to recuperate in a secluded neighborhood of $30 million villas on a white-sand island here. He worked on his kite-surfing, caught up with friends in beachside clubs and kept his 100-foot yacht, Da Moon, moored nearby.

Despite his freedom, all wasn’t well. Binance, Zhao’s crypto exchange—owned by a felon and shackled by U.S. authorities—was struggling. Its new overseers were turning the screws to eliminate the practices that had made it a giant money-laundering mill. Binance’s top legal staff were certain the company was doomed.

Then Donald Trump’s surging presidential campaign presented an opportunity.

Around the time of the election, Zhao’s representatives began discussions with allies of Trump, saying they wanted to find a solution to Binance’s legal troubles in the U.S. and offering a deal with a Trump family business, according to people familiar with the discussions.

Once Trump won, Binance formed a high-level task force to strike a deal with the Trumps’ nascent cryptocurrency venture, World Liberty Financial, that Binance could leverage into clemency for Zhao, other people familiar with the matter said.

This spring, Binance took steps that catapulted the Trump family venture’s new stablecoin product, enhancing its credibility and pushing its market capitalization up from $127 million to over $2.1 billion. 

Trump granted Zhao a presidential pardon last week, likely paving the way for the world’s largest crypto-trading platform to return to the U.S., from where it was banned after the company pleaded guilty in 2023 to violating anti-money-laundering rules. At the time, the government said Zhao had caused “significant harm to U.S. national security” by allowing sanctioned Iranian crypto exchanges, Russian drug-traffickers, Hamas militants and other criminal groups to move billions of dollars through the exchange.

The pardon marks the most distinct instance yet of Trump using the powers of his office to benefit someone at the center of deals that have enriched his family.

Ahead of the launch in March of World Liberty’s dollar-pegged cryptocurrency, USD1, Binance deployed a team of over a dozen engineers to build the technology behind the currency, people familiar with the project said. 

Binance then struck a deal for an Emirati state investor to buy a minority stake in Zhao’s crypto exchange. Binance asked that the $2 billion purchase price be paid using USD1, people familiar with the transaction said.

The use of USD1 boosted World Liberty, hugely expanding its market cap and giving it new clout. That in turn helped with sales of its other cryptocurrency, WLFI , which has a value that fluctuates on the market. World Liberty’s business partners have cited its stablecoin’s success as a reason to invest in WLFI.

World Liberty raked in about $1.4 billion in revenue over the past year from WLFI sales, far more than the president’s real-estate portfolio ever earned annually. World Liberty’s website says the company is about 40% owned by a Trump family entity that is entitled to three-quarters of the company’s revenue from those sales. 

Binance’s deployment of engineers and its involvement in the Emirati deal’s currency haven’t been previously reported.

Representatives for World Liberty said the company had never discussed a pardon. Tom Clare, a lawyer representing the company, said World Liberty “has never assisted in, facilitated, or influenced a decision on Mr. Zhao’s presidential pardon.” 

The company does support the pardon, World Liberty spokeswoman Gail Gitcho said. “Everyone who has been a victim of Joe Biden’s lawfare has rightfully been pardoned,” she said.

Gitcho also said Zhao, who is known as CZ, hasn’t been a financial backer of World Liberty and denied that Binance was involved in arranging the use of USD1 in the deal with MGX, the Emirati state investor that bought a stake in Binance. “CZ has never given WLFI a single dollar,” Gitcho said, referring to World Liberty.

She described the relationship as typical of any company that uses the crypto exchange. World Liberty’s “dealing with Binance is like selling ice cream and dealing with the milk distributor,” she said.

Wayne F. Dennison, a lawyer for Binance, said there was no impropriety. He said that since Binance is the world’s largest crypto exchange, it is practically impossible for any crypto project to avoid engagement in some way with it.

Dennison said Binance “did not control the stablecoin chosen by MGX” and said neither Binance nor Zhao acted as a relationship facilitator or financier to World Liberty. 

White House press secretary Karoline Leavitt said, “Neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest.”

Trump said last week that Zhao had been “persecuted by the Biden administration” and that he gave him a pardon “at the request of a lot of very good people.”

Trump special envoy Steve Witkoff, who co-founded World Liberty with his son Zach and the Trump family last fall, had recently expressed that he was confident in a pardon, a person familiar with the matter said. An administration official said this was false. Gitcho said Steve Witkoff “has never had any operational control” of World Liberty. 

The pardon’s timing surprised some administration officials, according to people familiar with the matter. Some administration officials had expressed concerns about the optics of pardoning the head of a foreign company that was convicted of severe anti-money-laundering violations, and how such a move could encourage wrongdoing by others, some of the people said. A White House official denied the pardon caused any surprise. 

Inside the Justice Department, some officials thought a pardon was unlikely because it wasn’t in the U.S. interest to reopen the door to Binance, according to people familiar with their thinking.

The pardon crowns Zhao’s efforts to leave behind his persona non grata status and return to his role as an industry titan feted by foreign leaders, with more riches than ever before.

It will likely help Binance to operate again in the U.S., formerly one of the exchange’s largest markets, contributing as much as a third of its billions of dollars in annual revenue.

The company has been subject to monitoring by the Justice and Treasury departments since last year to ensure Binance exited from the U.S. and complied with anti-money-laundering laws. The Justice monitorship could end, although a Treasury monitor, scheduled to continue until 2029, will likely remain, according to people familiar with the monitorships.

The Justice and Treasury departments declined to comment on the monitorships.

Binance had already been wriggling free from these overseers, petitioning Treasury officials for their removal in March and slow-walking or blocking many of the monitors’ requests to review internal records and interview employees, some of those people said.

Dennison, the Binance lawyer, said, “Binance and its legal team remain committed to complying with all legal requirements with integrity and transparency.” 

And prior to the pardon, Zhao’s business was making fresh inroads in the U.S. Binance’s own cryptocurrency, BNB, has been accessible to American investors through U.S.-listed companies that are piling into the token, helping double Zhao’s net worth over the past year to at least $80 billion.

Zhao was already thinking about his future under a possible Trump presidency while sharing Cell No. 5 in Lompoc’s federal prison with a double-murderer who was a bad snorer, according to interviews with crypto podcasters and others after his release. 

He was serving a four-month sentence, after pleading guilty in late 2023 to failing to maintain an effective anti-money-laundering program and resigning as Binance’s chief executive. According to the U.S. allegations against him, Binance’s top compliance official once told colleagues that Zhao didn’t want the exchange to vet users’ identities and that its customers were “here for crime.” Zhao told employees it was “better to ask for forgiveness than permission,” prosecutors said.

As part of his plea, Zhao agreed not to involve himself again in Binance’s day-to-day operations, and U.S. authorities imposed a record $4.3 billion fine on the company itself. 

At Lompoc, Zhao occupied himself by running a study group to teach fellow inmates about crypto, and guards asked him for trading tips, he later told an interviewer. 

Halfway into his jail term, Zhao was surprised to see on TV that Trump, while on the campaign trail, had declared himself pro-crypto at a Nashville bitcoin conference, reversing his prior skepticism.

“I’m still sitting in prison, and I’m like, ‘What the hell happened,’” Zhao said in a separate interview. In another, he said: “Obviously this would be a good guy for our industry, and also for any sort of people who have a criminal charge, unfairly I think.”

He emerged in September to a strange new world, in which crypto was now politically fashionable—a reversal from the Biden administration’s efforts to crack down on the industry through regulation, lawsuits and criminal investigations. 

On his return to Abu Dhabi, where he had settled with his romantic partner and Binance co-founder, Yi He, and their children, Zhao tweeted he needed some time to figure out his next steps. He gave a cautious onstage interview at a Binance event in Dubai a month later, saying he wanted to stay far from politics and had to respect his plea deal. Though he noted, “Everything changes. Agreements can be updated with new agreements. Even governments change.”

At Binance, the mood had soured. Though still sporting some 250 million users around the world, the exchange’s share of the crypto trading market had sunk to its lowest level in almost four years, according to researcher CCData.

The U.S. monitors—particularly lawyers at New York firm Sullivan & Cromwell, appointed by Treasury—flooded executives with requests to interview employees, tighten checks on clients and scrutinize billions of dollars of past transactions. Binance’s top legal staff believed U.S. authorities would end up punishing Binance with even tougher measures for failing to comply.

Zhao’s criminal troubles were also holding up Binance’s expansion plans in Europe , as well as its efforts to get new licenses in the United Arab Emirates and elsewhere.

Trump launched World Liberty in September 2024, saying it would help make “America the crypto capital of the world.” The company’s aim, according to its founding document, was to spread adoption of dollar-backed cryptocurrencies, known as stablecoins, to uphold dollar dominance.

The project raised $20 million from WLFI sales over its first month. “Nobody really believed in us in the beginning,” Zach Witkoff said recently at a conference, saying that last year some crypto players had called the company “a joke.”

The internal task force under Zhao’s replacement as CEO, Richard Teng, studied how to move money into the Trump family company, inspired by crypto tycoon Justin Sun’s $30 million purchase of WLFI tokens from World Liberty announced soon after the election in November, according to people familiar with the working group. The Securities and Exchange Commission later paused a fraud case against Sun. A spokesperson for Sun previously said that his investment decisions aren’t politically motivated.

Binance didn’t make a purchase. Instead it committed a team including its Hong Kong-based stablecoin chief to build the blockchain technology for USD1, people familiar with the project said. 

Gitcho, the World Liberty spokeswoman, said Binance provided World Liberty with so-called smart contracts, which govern how a stablecoin operates on the blockchain, “to save WLFI the headache of reproducing them, but not in exchange for anything.”

In October 2024, World Liberty hired one of Zhao’s close friends, Rich Teo, who had run a Binance stablecoin product that was shut down two years ago following an order from a New York regulator. Teo didn’t respond to a request for comment. Gitcho said Teo wasn’t hired due to any relationship with Zhao.

Zhao and his partner He in early December hosted big Binance clients and high-profile guests, including Elon Musk’s father Errol Musk, on a yacht docked alongside Abu Dhabi’s Grand Prix racetrack. Also aboard was Bilal bin Saqib, a Pakistani tech entrepreneur whom World Liberty would later name an adviser. Guests danced on deck to a DJ and a saxophonist, while Formula One cars tore past.

A few days later, Zhao mingled with Eric Trump and Steve Witkoff at a bitcoin conference in the city. Afterward, Witkoff, whom Trump had appointed as a special White House envoy, surveyed people close to the U.S. case against Zhao, a person familiar with the talks said.

Gitcho said Eric Trump has met Zhao a couple of times but said, “Our understanding is that neither Steve nor Eric met with CZ” at the conference. An administration official denied that Witkoff held a meeting with Zhao at the conference or that he had surveyed people. White House spokeswoman Anna Kelly disputed any implication that Witkoff has conflicts of interest.  

In parallel, representatives of Trump’s family—including Witkoff—held deal talks with Binance representatives, including about taking a financial stake in Binance.US, the exchange’s moribund U.S. arm that operates separately, The Wall Street Journal previously reported . Binance set up Binance.US in 2019 as a bare-bones American platform obeying U.S. rules. The thinking among many at the time: If a Zhao pardon occurred and Binance settled its legal troubles, the global giant could absorb its U.S. arm. 

Zhao denied, in a post on X after the Journal article, that he discussed a Binance.US deal with anyone, adding that, “No felon would mind a pardon.” Gitcho said nobody at World Liberty knew anything about any Binance.US talks. An administration official denied that Witkoff had any involvement in such deal talks.

Meanwhile, Zhao had been in talks with Abu Dhabi’s royal family about an investment in Binance for several years, with his legal troubles holding a deal up. He curried favor in Abu Dhabi by backing a local tech incubator and building personal ties to the royals via a circle of well-connected friends on the city’s luxurious Saadiyat island.

In March, Binance announced a deal with MGX, an investment firm run by the brother of the U.A.E.’s president, Sheikh Mohamed bin Zayed Al Nahyan. MGX would take a minority stake worth $2 billion, the first time an institutional investor had bought into the exchange. To mark the occasion, Sheikh Mohamed invited Zhao to his ornate private palace where he typically welcomed foreign dignitaries, hidden from the city across an inlet by a dense bank of trees. 

“God has willed it,” Zhao, who had obtained Emirati citizenship, tweeted in Arabic with a photo of the pair, wearing a traditional thobe.

But before the deal was sealed, Binance had a request. It asked MGX to pay the $2 billion purchase price in the soon-to-be-released World Liberty stablecoin, people familiar with the deal said. The Emiratis agreed. 

A World Liberty executive told a business associate around that time that Abu Dhabi’s royal family had a keen interest in enabling Trump’s crypto ambitions. Gitcho, the World Liberty spokeswoman, said the executive had no recollection of making such a statement. 

To complete the transaction, MGX bought USD1 from World Liberty, handing the Trump family venture a $2 billion cash pile. World Liberty holds those funds in reserve to maintain the coins’ 1-for-1 tie to the dollar, unless the USD1 tokens are swapped back into real-world cash. The company invests the reserves in Treasurys and pockets the interest. If held for a year, the $2 billion sum would generate about $80 million in profit for World Liberty. 

The size of the MGX deal rocketed USD1 up the rankings of largest stablecoins. Gitcho said there were “tons of other massive deals on the table for USD1. It was only a matter of time before someone picked up on it.” 

People close to the transaction at the time privately expressed confusion about MGX’s choice of USD1 and sought to understand why the stablecoin had been selected, according to people familiar with the matter.

A spokeswoman for MGX said Binance requested the transaction be settled in cryptocurrency, and MGX then selected USD1 after examining factors including “business suitability.” 

In late April, Zhao met Zach Witkoff and Saqib, the Pakistani crypto entrepreneur, at a glitzy beachfront restaurant on Saadiyat’s St. Regis resort for a private Binance summit for top clients. A U.A.E. executive who oversaw the MGX investment—and is also a World Liberty adviser—attended, too, along with a lobbyist representing both Binance and World Liberty. The following evening, while a drone show spelled out MGX above the sea, World Liberty began issuing the USD1 for the deal. MGX finalized its stake in Binance two days later. 

MGX transferred the $2 billion in USD1 to Binance, and since then Binance has been holding most of those tokens on its own platform, according to blockchain data and people familiar with the deal. 

Gitcho said Zhao and Zach Witkoff are friends and that the World Liberty team was at the summit to meet with MGX to discuss the firm’s interest in USD1.

In June, World Liberty announced a partnership with a crypto-trading platform called PancakeSwap to “drive USD1 adoption.” The platform, which is administered by Binance, offers rewards and prizes to traders using coins in the Binance blockchain ecosystem. The partnership sent USD1’s trading volumes soaring, the Journal previously reported.  

Gitcho said Binance hasn’t been boosting USD1 through PancakeSwap and that World Liberty has many partnerships.

At a Binance Clubhouse event in Dubai several days after the Binance summit, Zhao told a gathering that he was a victim of “a war on crypto by the last administration. But now there is a counter-reaction. Now they’ll let us accelerate much faster.”

In a podcast interview published in early May, Zhao said his lawyers had submitted an application for a pardon two weeks earlier. He decided to apply after the Journal and others reported he was seeking a pardon, he said, adding that he thought he “might as well just officially apply.” 

Allies of Zhao were beginning to privately express frustration that a pardon hadn’t yet materialized, particularly as Trump had pardoned several other crypto tycoons, including Silk Road founder Ross Ulbricht . They lamented that it hadn’t been as straightforward as anticipated and sought advice, people familiar with the discussions said. 

In the spring, Zhao embarked on a world tour to encourage foreign leaders to introduce more favorable crypto regulations. 

In Pakistan, Zhao met the deputy prime minister with Saqib, who had become a globe-trotting ambassador for World Liberty, and joined a state crypto council Saqib headed. “You are not just a man, you are a movement,” Saqib told Zhao during a sit-down at Lahore’s Mughal-style fort. 

Saqib then arranged a visit by Zach Witkoff to sign an agreement between Pakistan’s government and World Liberty. Binance is also in line to obtain one of the first crypto-exchange licenses granted by Pakistan’s new crypto regulator, people familiar with the process said. Pakistan’s government in May appointed Saqib as a special assistant on crypto, with oversight over that regulator. 

Gitcho said Saqib has been helping World Liberty “create a framework to export stablecoin to other countries.” Saqib and Zhao knew each other separately from World Liberty, which has never helped Zhao “in any capacity,” she said. Saqib didn’t respond to requests for comment.

In a sign of Zhao’s improving fortunes in the U.S., he struck deals to boost the value of Binance’s BNB cryptocurrency with U.S. investor money.

The so-called crypto-treasury strategy , whereby publicly listed companies issue shares and debt to fund the purchase of certain cryptocurrency, has been a hot trend on Wall Street. In the case of Binance, the previous administration would likely have scrutinized those deals in light of the Treasury Department and other orders against Binance, former administration officials said.

The value of all BNB tokens in circulation has gained 75% since July to $154 billion. Zhao owns at least half of them, according to former Binance executives and filings. 

Meanwhile, Binance ramped up its lobbying efforts in the U.S. 

The company has hired four U.S. lobbying firms this year, spending about $800,000 on lobbying in the first nine months of this year after hiring no lobbyists the previous year, according to federal records. Of that, $450,000 went to a firm run by Ches McDowell, a lobbyist close to the Trump family. Binance hired the lobbyist to push for a pardon and on crypto policy issues, records show.

Binance paid $260,000 to another company, BakerHostetler, to lobby on crypto policy and “executive relief.” One of its lobbyists, Teresa Goody Guillén, who had been at the private Binance summit for top clients in April, also represented World Liberty this year in letters to Congress. 

Representatives of Binance sought to make the case that Zhao’s actions wouldn’t have been prosecutable under the current administration, according to a person familiar with the discussions. The White House agreed with that view, the person said.

But resistance to a pardon among both political parties remained. Among some Trump advisers, there was an awareness that pardoning a business associate of the Trump family could trigger congressional scrutiny if Democrats retake the House in next year’s midterm elections, people close to the discussions said. 

Rep. Jerry Nadler (D., N.Y.) wrote in a post on X last week, “Trump is selling pardons to anyone who can personally profit him. It’s a shameful abuse of power and a mockery of justice.”

Palantir co-founder Joe Lonsdale, a top Trump supporter, posted on X last week, “POTUS has been terribly advised on this; it makes it look like massive fraud is happening around him in this area.”

Laura Loomer, a confidante of Trump, publicly rebuked a potential pardon earlier this month, citing Zhao’s Chinese origin and Emirati citizenship. “You know who gets Emirati citizenship when they weren’t born in the UAE? People who are trying to evade punishment for crimes,” she wrote on X.

Zhao retorted that he no longer holds Chinese citizenship, adding, “Please do not project your stereotypes onto others.” In a separate tweet, he said a pardon would be “great news.”

His wish was finally answered last week. Confirming the pardon Oct. 23, Leavitt, the White House press secretary, said, “The Biden administration’s war on crypto is over.” 

Weeks before the pardon, Zhao had already tweaked the description on his X account. Instead of “ex-binance,” it now just read, “binance.”