Zhao was released from prison last year after receiving a four-month sentence for violating the Bank Secrecy Act. He was the first person ever sentenced to prison time for such violations of that law, which requires US financial institutions to know who their customers are, to monitor transactions and to file reports of suspicious activity. Prosecutors said no one had ever violated the regulations to the extent Zhao did.
The judge in the case said he was troubled by Zhao’s decision to ignore US banking requirements that would have slowed the company’s explosive growth.
Trump’s pardon of Zhao fits into a broad pattern of his taking a hands-off approach to an industry that spent heavily to help him win the election in 2024.Credit: AP
“Better to ask for forgiveness than permission,” was what Zhao told his employees about the company’s approach to US law, prosecutors said. Binance allowed more than 1.5 million virtual currency trades, totaling nearly $US900 million, that violated US sanctions, including ones involving Hamas’ al-Qassam Brigades, al-Qaida and Iran, prosecutors said.
“I failed here,” Zhao told the court last year during sentencing. “I deeply regret my failure, and I am sorry.”
Zhao had a remarkable path to becoming a crypto billionaire. He grew up in rural China and his family immigrated to Canada after the 1989 Tiananmen Square massacre. As a teenager, he worked at a McDonald’s and became enamoured with the tech industry in college. He founded Binance in 2017.
Loading
In addition to taking pro-crypto enforcement and regulatory positions, the president and his family have plunged headfirst into making money in crypto.
A stablecoin launched by World Liberty Financial, a crypto project founded by Trump and sons Donald Jr. and Eric, received early support and credibility thanks to an investment fund in the United Arab Emirates using $US2 billion worth of World Liberty’s stablecoin to purchase a stake in Binance. Stablecoins are a type of cryptocurrency that are typically tied to the value of the US dollar.
A separate World Liberty Finance token saw a huge spike in price Thursday shortly after news of the pardon was made public, with gains that far outpaced any other major cryptocurrency, according to data from CoinMarketCap.
Zhao said earlier this year that his lawyers had requested a pardon.
Loading
It is not immediately clear what impact Trump’s pardon of Zhao may have for operations at Binance and Binance.US, a separate arm of the main exchange offering more limited trading options to US residents.
AP
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
