Zhao told the Times he had planned to sell the tokens gradually and had not intended to destroy FTX. He said Binance lost $500 million.
$USD1 Deal Draws Conflicting Accounts
Separately, Emirati investment firm MGX agreed to invest $2 billion in Binance in early 2025. The transaction used $USD1, issued by World Liberty, which President Donald Trump founded with his sons. Zhao said he preferred Bitcoin, but the Emiratis preferred stablecoins due to price volatility.
MGX said it evaluated several stablecoins and chose $USD1 for business suitability. However, The Wall Street Journal reported that Binance specifically requested $USD1. Zhao disputed that account, saying MGX made the choice.
The transaction provided World Liberty with funds to back its stablecoin, allowing it to earn returns by investing those reserves. An Emirati-backed firm had also acquired a 49% stake in World Liberty before Trump’s inauguration.
Democratic lawmakers criticized the arrangement. Senator Richard Blumenthal characterized it as an effort to gain political favor. Zhao denied wrongdoing.
Pardon Follows Deal and Lobbying
Trump pardoned Zhao in October 2025, following his guilty plea for violating an anti-money-laundering law. According to the Times, Binance paid $2.1 million to a lobbying firm for services that included executive relief. World Liberty said it had no involvement in pardon decisions.
The report described criticism linking the business relationship and clemency, but did not establish a quid pro quo. Zhao lives in Abu Dhabi. Although Binance’s plea agreement prohibited him from operating or managing the company, his partner, He Yi, serves as co-chief executive, and he retains majority ownership.
Binance Faces Renewed Scrutiny Over Iran Links
Binance has also faced renewed scrutiny over its handling of funds linked to Iran. Four Binance compliance officials were fired or suspended after raising concerns that nearly $2 billion had flowed from customer accounts to a group of entities tied to Iran. Binance disputed the officials’ findings and said they were not fired or suspended for raising concerns about the transactions. The Justice Department later said two Chinese firms had used Binance to launder proceeds from Iranian oil sales, although it did not bring charges against the exchange.
Related: FTX and Binance Founders’ Legal Cases Show Crypto’s Dark Corners
