As Donald Trump returns to the US presidency again, his pro-crypto stance has sparked optimism for Binance. IOHK founder Charles Hoskinson and crypto advisor and VC John Lilic are calling for a pardon for Binance founder Changpeng Zhao.
Many hope that the crypto industry will mature at least in the regulatory framework under pro-crypto administrators. This could cut short financial windfalls for regulated businesses in the sector. However, its impact on Binance is speculative at best at the time of writing.
Why are there calls for a Presidential Pardon for CZ?
A Presidential Pardon is a legal act. In the US, the POTUS has the power to forgive a person for a federal crime. Well, it doesn’t mean they will automatically become innocent. The act just removes legal consequences like jail time or fines.
Cardano and IOHK founder Charles Hoskinson and crypto-economic builder and VC John Lilic are backing a plea urging incoming US President Donald Trump to pardon Binance founder Changpeng Zhao. Lilic argues that CZ’s leadership is important for the crypto industry while describing him as a victim of “lawfare”—a misuse of legal systems to bring down opponents.
In the past, crypto advocate Max Keiser alleged that Sam Bankman-Fried, the disgraced founder of FTX would get a presidential pardon by incriminating CZ. In April, Changpeng Zhao received a four-month prison sentence for allowing criminal trades on Binance. He was released in September. After the guilty sentence in November 2023, CZ had to step down as the CEO of Binance.
SBF will throw CZ under the bus and then he’ll get a Presidential pardon.
— Max Keiser (@maxkeiser) October 28, 2023
In the interim, SBF remains in jail completing his 25-year sentence for multiple criminal accounts and fraud charges. Over the months, commentators have argued that CZ has been unfairly targeted amid shifting regulatory policies, while SBF continues to face serious accusations of fraud and financial misconduct. If CZ is proven a scapegoat once Trump takes over, a pardon is speculatively likely. Especially since the crypto community’s support for CZ aligns with Trump’s pro-crypto rhetoric.
CZ pardon will strengthen Trump’s pro-crypto stance
During his election campaign, Trump promised better regulations for the crypto sector. Now, he has advocated for the industry’s growth through a Bitcoin Reserve, redirecting the securities and commodities regulators, replacing SEC chief Gary Gensler, and bringing ‘DOGEFather’ Elon Musk into the D.O.G.E vertical. An official forgiveness to the former chief of the largest crypto exchange would fit well in his series of changes for the sector.
During his last term, Trump used his power to grant pardons and reduce sentences less often than most modern presidents, according to PewResearch. But he granted over 70 pardons by the end of his term which included names like Steve Bannon and Elliott Broidy. He reportedly reduced the sentences of 70 others.
Trump’s list of pardons | Image Source: Catherine Herridge (@C__Herridge), X (Twitter), December 24, 2020, CBS
The market has already made an indirect connection between CZ and Trump. Bloomberg reported that Changpeng Zhao’s net worth surged by $12 billion after the US Elections in November. CZ’s wealth reportedly made a jump from $38 billion on election day to $52.7 billion the next morning. This proves that there are expectations of friendlier regulatory actions under the Trump administration.
Despite his legal troubles, CZ is a prominent figure for Binance and crypto in general. According to a previous report by the South China Morning Post, Zhao was reportedly met with applause and adoration from fans in a public event post his release.
Therefore, Trump’s pro-crypto stance, coupled with recent market reactions to his victory, sets the stage for a positive development in the CZ-Binance story. But at the time of writing, it remains purely speculative.
