Conflict of interest: Binance wrote code for Donald Trump's crypto token before founder Changpeng Zhao sought pardon
According to sources cited by Bloomberg, the world's largest crypto exchange supported the Trump family company with code for its stablecoin USD1, and also promoted the coin to its 275 million users. This came before convicted felon and Binance founder, Zhao, known as CZ, sought a presidential pardon in his 2023 money laundering case, it added.
The report added that there are over $2 billion worth of USD1 in Binance wallets, which at 4 per cent yield would generate $80 million annually — and the Trump family would be entitled to about $30 million of it.
CZ in 2023 pled guilty to failing to maintain an effective anti-money-laundering program. At the time, the conviction came on the back of the Sam Bankman-Fried-led FTX collapse, and shook the crypto industry.
A spokesperson for Binance did not respond to all queries and said that the exchange followed 'standard listing process' and that CZ is no longer CEO of Binance, so the decision to seek pardon is 'personal'.
CZ did not respond to queries and a White House spokesperson declined to comment, BB added. Further, a spokesperson for World Liberty Financial told the agency its 'assertions are factually deficient and designed to further a political agenda'.
Two sources said that Zhao met with World Liberty co-founder Steve Witkoff after Donald Trump's victory in December 2024 at a Bitcoin conference in Abu Dhabi; but there was no direct confirmation from either companies, the report said.
In mid-March, Bloomberg reported that Binance and World Liberty were talking about developing a new stablecoin, and The Wall Street Journal reported that Zhao had approached the Trump administration for a pardon.
Binance wrote the basic code or 'smart contract' to power USD1 and helped make it ready for use in April when an UAE firm used the token to buy a stake in Binance for $2 billion, as per the report. Till date, around 90 per cent of the coins from that transaction remain in Binance wallets, it said, citing blockchain data.
Meanwhile, interest income generated from the assets could run into 'tens of millions' annually, for the Trump family, it added.
Thus, coupled with the promotion to its own users, Binance helped create the coin, and participated in its largest transactions, the report noted, adding that it was unclear if anything or how much Binance or Zhao received in return.
The situation has renewed concern over conflict of interest as Zhao wants a pardon and his beneficiary Donald Trump is the only one who can provide it.
Former White House chief ethics counsel (2005-07) and University of Minnesota Law School professor Richard Painter told BB the scale of this conflict of interest has not been seen since the American Civil War (1861-65).
'We have never had this since the Civil War: a president whose personal financial interests conflicted with his official duties. We haven't had anything even close to this significant,' Painter stated.
The White House has in previous statement denied any conflict of interest as Donald Trumo has placed his assets in a trust controlled by eldest son Don Jr, further he also signed an ethics agreement to only receive 'general updates' and no specifics on 'accounting.. performance.. or asset'.
Notably, since his previous term in 2016, Donald Trump has done a complete 180 on crypto, going from calling it a 'scam' to promising to make the US 'crypto capital of the world'.
(With inputs from Bloomberg)
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