Conflict of Interest: Binance Developed Code for Donald Trump’s Crypto Token Prior to Founder Changpeng Zhao Seeking Presidential Pardon
In a revealing report that has stirred controversy over potential conflicts of interest, Binance, the world’s largest cryptocurrency exchange, reportedly played a pivotal role in the creation and promotion of Donald Trump’s crypto token, USD1, before its founder Changpeng Zhao (commonly known as CZ) sought a presidential pardon for a money laundering conviction.
Binance’s Role in the Trump Family’s USD1 Stablecoin
According to sources cited by Bloomberg, Binance provided crucial support to World Liberty Financial, a company owned by the Trump family, by writing the smart contract code underpinning the USD1 stablecoin and promoting the token to Binance’s user base of approximately 275 million. This cooperation occurred prior to CZ’s highly publicized 2023 bid for a presidential pardon related to his conviction on charges of failing to maintain an adequate anti-money laundering program.
Blockchain data indicates that over $2 billion worth of USD1 tokens are currently held in Binance wallets. The token yields an approximate 4% annual return, generating an estimated $80 million each year, of which the Trump family reportedly stands to receive about $30 million.
Background on Zhao’s Conviction and Pardon Attempt
CZ pleaded guilty in 2023 following an investigation triggered by the collapse of FTX, the cryptocurrency exchange managed by Sam Bankman-Fried. His conviction centred on Binance’s failure to uphold effective anti-money laundering controls. Binance’s involvement with the Trump family’s stablecoin has raised concerns that Zhao’s efforts to secure a presidential pardon could be marred by conflicts of interest, given that his beneficiary would be none other than Donald Trump himself.
Company Responses and Political Implications
Binance, when approached for comments, stated that the USD1 listing followed standard procedures. The company also emphasized that Zhao no longer serves as Binance’s CEO and declared that his pardon request was a personal matter. CZ has not publicly responded to inquiries, and the White House declined to comment on the reports.
World Liberty Financial refuted the allegations, calling them “factually deficient” and politically motivated. Bloomberg also reported that Zhao met with World Liberty co-founder Steve Witkoff at a Bitcoin conference in Abu Dhabi shortly after Trump’s 2024 election victory, although neither company confirmed the meeting.
Details of Binance’s Assistance with USD1
The collaboration reportedly extended beyond marketing. Binance reportedly wrote the basic code—or smart contract—necessary to operate USD1 and prepared it for launch in April, coinciding with a transaction wherein a UAE-based firm used the token to acquire a $2 billion stake in Binance. Notably, approximately 90% of the tokens involved in this transaction remain in Binance-controlled wallets today.
The stablecoin’s yield, distributed annually, could result in tens of millions of dollars of income for the Trump family. However, it remains unclear whether Binance or Zhao received any direct financial benefits in connection with their support for the token.
Renewed Concerns Over Conflict of Interest
This latest development has intensified scrutiny over possible conflict of interest risks, as the U.S. President holds exclusive authority to grant pardons and also stands to benefit financially from the success of the cryptocurrency supported by Binance and Zhao.
Richard Painter, a University of Minnesota Law School professor and former White House ethics counsel, told Bloomberg that the scale of this conflict rivals one unseen since the American Civil War. He highlighted the unprecedented nature of a president whose private financial interests are so closely entangled with official duties.
The White House has previously dismissed such concerns, stating that Donald Trump’s assets are controlled by a trust managed by his eldest son, Donald Trump Jr., and that the former president has signed an ethics agreement limiting his access to detailed financial information.
Trump’s Shift on Cryptocurrency
Interestingly, since his initial term and public skepticism of cryptocurrencies—once dismissing crypto as a “scam”—Trump has reversed his stance. In his 2024 campaign, he pledged to establish the United States as the “crypto capital of the world,” signaling a significant policy shift.
The interplay between Binance, the Trump family, and presidential pardon politics underscores the complex and often opaque relationships shaping the burgeoning cryptocurrency landscape. Observers and regulators alike will likely watch closely as these developments unfold.
This article was written with inputs from Bloomberg and other sources. For continued coverage of cryptocurrency, business, and political ethics, stay tuned to Live Mint.