Washington (AFP) – US President Donald Trump has pardoned the convicted Binance co-founder Changpeng "CZ" Zhao, the White House press secretary said Thursday, accusing Trump's predecessor Joe Biden of behaving in a "very hostile" manner toward the crypto industry.
Binance was created in 2017, and swiftly became the world's largest cryptocurrency exchange by volume, turning Zhao into a billionaire.
Following an investigation into the firm's operations, Zhao pleaded guilty to violating US anti-money-laundering laws in late 2023, and served a four-month prison sentence for it in 2024.
Zhao's pardon could help pave the way for Binance to return to the United States, around two years after it agreed to suspend its US operations in a deal to resolve the Department of Justice's criminal investigation.
"This was an overly prosecuted case by the Biden administration," White House press secretary Karoline Leavitt told reporters in Washington on Thursday, accusing the previous administration of pursuing an "egregious over-sentencing of this individual."
The previous administration had also been "very hostile" to the cryptocurrency industry, she continued, adding that Trump had pardoned Zhao in order to "correct this overreach of the Biden administration's mis-justice."
Trump later defended his decision, telling reporters at the White House that "a lot of people" had told him Zhao was not guilty.
Binance has spent almost a year pursuing a pardon for Zhao, the Wall Street Journal reported on Thursday, noting that Binance has been a "key supporter" of the Trump family's crypto venture World Liberty Financial.
Despite stepping down as chief executive in 2023, Zhao remains the majority shareholder of Binance.
In a social media post on Thursday, he said he was "deeply" grateful to Trump for "upholding America's commitment to fairness, innovation, and justice."
Democrats were quick to criticize Trump's decision to pardon the convicted crypto billionaire.
"CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison. But then he financed President Trump's stablecoin and lobbied for a pardon. Today, he got it," Massachusetts Senator Elizabeth Warren wrote in a post on X.
"If Congress does not stop this kind of corruption, it owns it," added Warren, a high-profile figure on the left of the party who sits on the US Senate's finance committee.
Since his presidential campaign, Trump has become a defender and promoter of the cryptocurrency sector, reversing his past criticism.
He has eased the regulatory framework imposed on the cryptocurrency industry, which contributed more than $100 million to his reelection campaign.
The Trump family's various crypto businesses have netted them a pre-tax profit of around a billion dollars over the past 12 months, according to a recent Financial Times investigation.
Trump's pardon of Zhao follows a string of other similarly controversial moves, such as his decision to issue a blanket pardon for people convicted of violence in the attack on the US Capitol on January 6, 2021.
The US president has also commuted the sentence of the disgraced former Republican lawmaker George Santos, who was convicted of committing wire fraud and identity theft.