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Time of India
a day ago
- Business
- Time of India
Crypto cold war heats up: As Pakistan, Bhutan, and US go all in, where does India stand? Report reveals how the world is weaponising blockchain
In the evolving battle for digital dominance, cryptocurrency has emerged as more than just a financial experiment, it is now a tool of diplomacy, economic survival, and geopolitical manoeuvring. According to an ET report, countries from Pakistan to Bhutan, the US to the UAE, are embedding crypto into their national strategies. But amid this global pivot, India remains cautious, caught in a regulatory limbo that experts say is increasingly risky. Pakistan's crypto push: Strategic ties and suspicious timing Weeks before the Pahalgam terror attack, Changpeng Zhao, founder of Binance, agreed to advise the newly-formed Pakistan Crypto Council (PCC). In July, President Asif Ali Zardari signed an ordinance setting up the Pakistan Virtual Asset Regulatory Authority (PVARA), allowing the country to license and regulate crypto entities. The move coincides with Pakistan's deepening ties to World Liberty Financial (WLF), a Trump-linked crypto firm. As ET notes, Pakistan is using crypto not just to attract investment but to gain currency with Washington. This could explain the US's relatively muted stance on Pakistan during Operation Sindoor. 'Crypto is becoming a channel for strategic financial flows for Pakistan,' Anirudh Suri of India Internet Fund told ET. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like นี่อาจเป็นโอกาสทองที่ดีที่สุดในรอบ 5 ปีสำหรับการเทรดทองคำ IC Markets อ่านเพิ่มเติม Undo He warns that this strategy poses a threat to India's attempts to cut off terror financing through global agencies like FATF and IMF. India's position: Still undecided, still unclear Despite multiple reminders from the Supreme Court, India is yet to clarify its stance on cryptocurrency. In a hearing in May, the apex court asked why the Centre had not produced a clear policy. The Reserve Bank of India remains sceptical, citing concerns over monetary stability, while SEBI has reportedly suggested multi-agency oversight. As ET highlights, India currently levies a 30% tax on crypto gains and 1% TDS on larger transactions, while exchanges are required to register with FIU-IND. Yet, a promised discussion paper outlining a national crypto framework, expected in June, is still awaited. Meanwhile, the use of crypto in terror financing is reportedly on the rise. Following the Pahalgam attack, FIU instructed exchanges to monitor transactions from Jammu and Kashmir, specifically scrutinizing private wallets and privacy coins, ET reported. Bhutan's bitcoin reserves: Small state, bold bet While Pakistan's crypto strategy raises alarms, Bhutan presents a very different model. As per ET, the Himalayan kingdom has mined over $1.3 billion worth of bitcoin, nearly 40% of its GDP, using surplus hydropower. Bitcoin now supports Bhutan's public spending, tourism projects, and even salary hikes for civil servants. Although India supports Bhutan's economic diversification, ET notes concerns about reduced hydropower exports and the country's increasing reliance on Chinese bitcoin mining gear. Companies like Adani are exploring data center opportunities there, which could shape bilateral ties going forward. Trump, stablecoins and the blurred lines of power In the US, the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act is set for a vote. It aims to regulate stablecoins like USD1, launched by Trump's firm, World Liberty Financial. According to ET, Trump earned $57.4 million in 2024 from this venture, sparking allegations that the act could enable political favours for investors. An Abu Dhabi-based fund has already pledged $2 billion in USD1 for Binance. Experts quoted by ET worry that countries like Pakistan may exploit these loopholes to regain favour with the US. Subimal Bhattacharjee, a cybersecurity expert, warns this could undermine global financial norms under the cover of policy. What India must do - before it falls behind Experts say India must act quickly. 'Crypto doesn't really listen to borders,' Ananya Kumar of the Atlantic Council told ET. 'It's not a domestic issue, it's a global one.' Jaideep Reddy of Trilegal added that crypto lacks legal clarity under India's securities, foreign exchange, and tax laws, creating confusion for both businesses and consumers. ET also highlights concerns over capital flight via dollar-backed stablecoins. Regulating such flows while enabling legitimate innovation is critical, say experts. As the Supreme Court presses for answers and neighbours surge ahead with defined policies, India faces a stark choice: lead with a robust, transparent crypto strategy, or risk being outpaced and outflanked in the new digital order. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Yahoo
a day ago
- Business
- Yahoo
Crypto Giant Accused of Secretly Helping Trump Company Before Founder Pushed for Pardon
Crypto giant Binance helped create and promote the Trump family's stablecoin just months before its founder applied for a presidential pardon, according to a new report. President Donald Trump once called Bitcoin a 'scam' but has since embraced cryptocurrency, saying he wants to make the U.S. the 'crypto capital of the world.' His sons Eric and Donald Trump Jr. launched a crypto company called World Liberty Financial last year and released their stablecoin USD1—which is pegged to the U.S dollar—in March. It turns out, though, that the basic code that powers USD1 was secretly written by Binance, the crypto exchange founded by Changpeng 'CZ' Zhao, who is seeking a presidential pardon, sources told Bloomberg. That code allowed an Emirati investment firm to buy a $2 billion stake in Binance using USD1 instead of a competitor coin, according to Bloomberg. Binance also promoted USD1 to its 275 million users. Around the same time that USD1 was released, Binance and World Liberty denied reports that they were in talks to develop a new stablecoin. It's not clear whether World Liberty paid Binance or Zhao to create the coin, Bloomberg reported. The assets backing the $2 billion in USD1 currently sitting in Binance wallets could generate tens of millions of dollars per year for the Trumps in interest income alone, according to the outlet. Regulatory filings by another stablecoin issuer, Circle Internet Group Inc., also offer some insight into the market value of World Liberty Financial's relationship with Binance. Circle paid Binance $60 million up front to promote its coin and agreed to share future revenue with the exchange. In 2023, Zhao and Binance were accused of violating federal U.S. laws designed to prevent money laundering. Both pled guilty, and Zhao paid a $50 million fine and stepped down from the company, which also paid $4.3 billion in fines. Zhao was also sentenced to four months in prison after pleading guilty to felony money laundering charges. In March he denied seeking a pardon from the Trump administration, only to say in May that he had applied for one after all. A spokesperson for Binance told Bloomberg that Zhao was no longer with the company and that his decision to apply for a pardon was 'a personal one.' A White House spokesperson declined to comment to Bloomberg. The Daily Beast has also requested comment. A World Liberty spokesperson told the outlet that the report's claims were 'factually deficient and designed to further a political agenda,' though she declined to respond to specific questions and set the record straight. Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Economic Times
2 days ago
- Business
- Economic Times
Trump backs crypto, Pakistan embraces it. How long must India wait?
Synopsis Pakistan embraces crypto for strategic gains, including potential US favor, while India grapples with regulatory uncertainty and security concerns. Other nations like Bhutan leverage crypto for economic diversification. The US faces scrutiny over stablecoin regulation and potential conflicts of interest, prompting calls for India to establish a clear, comprehensive crypto policy to address financial and security risks. ETtech Photo: Ewan Kennedy A couple of weeks before the Pahalgam attack, something strange happened in Islamabad. Changpeng Zhao, the Chinese-born Canadian businessman and founder of Binance, the world's largest cryptocurrency exchange, agreed to be an advisor to the Pakistan Crypto Council (PCC) in early April. PCC, freshly minted in March, was cobbled together to create a framework for crypto in a country that had until then been notoriously suspicious of digital the time, many wondered what Pakistan's motivation was in welcoming crypto, which officials maintained was a tool to attract foreign investment. In the subsequent months and during Operation Sindoor, it became clear that the move had a strategic angle as well. Pakistan, having signed up with World Liberty Financial (WLF), a crypto company linked to US President Donald Trump's family, was also using crypto to gain currency with the White House. That, along with carrots like a Nobel peace prize nomination for Trump, may have influenced the US's tepid pushback on Pakistan during the conflict. On July 9, Pakistan went all in with President Asif Ali Zardari signing an ordinance establishing the Pakistan Virtual Asset Regulatory Authority (PVARA), 'an autonomous federal body empowered to license, regulate and supervise entities dealing in virtual assets (VA)'.That is quite a move for a struggling economy desperate for bailouts from the International Monetary Front (IMF), but the reality is that Pakistan is not alone in embracing US is racing to legitimise stablecoins—a type of cryptocurrency pegged to stable assets. Almost 98% of stablecoins are tied to the dollar. India's neighbour Bhutan has quietly built bitcoin reserves worth $1.3 billion or roughly 40% of the country's gross domestic product (GDP), according to the Wall Street Journal . Countries like Russia, Iran and North Korea have been using it to conduct business, beyond the reach of the international sanctions countries with a clear agenda—from attracting investment, to sidestepping sanctions, or even currying favour with the world's elite—crypto is becoming a legit play. That has meant that from US to UAE, Singapore to Bhutan, countries have made crypto a part of their foreign and economic policy playbook. The big question: where is India in all of this?'Why does the Centre not come out with a clearcut policy on regulating cryptocurrency?'The Supreme Court's pointed question to Additional Solicitor General Aishwarya Bhati during a May 19 hearing encapsulates India's prolonged struggle with digital assets. The bench, hearing a bail plea in an illegal bitcoin trade case, stated: 'There is a parallel under-market for it and it can affect the economy. By regulating the cryptocurrency, you can keep an eye on the trade.'This wasn't the first judicial nudge. In February 2022, the apex court had similarly pressed the central government to clarify whether cryptocurrency trading was legal in repeated queries highlight a regulatory vacuum that continues to perplex the courts. India's crypto landscape remains in what experts describe as a 'state of flux' where lawsuits involving fraud get dismissed due to 'a lack of legal status for cryptocurrencies in India'.The Reserve Bank of India's concerns about financial stability continue to shape the government's cautious approach. The central bank fears that cryptocurrencies could undermine its control over money supply and pose risks to financial and monetary stability. This, even as the market regulator Securities and Exchange Board of India (Sebi) has reportedly recommended that several regulators oversee trade in cryptocurrencies. The Centre has to take a clear stance, backed by a well-defined policy vision, at a time when the technology is increasingly exploited by hostile the regulatory framework consists of a flat 30% tax on capital gains and 1% tax deducted at source (TDS) on transactions above Rs 10,000, introduced in 2022. In March 2023, the finance ministry mandated all crypto exchanges operating in India to register with the Financial Intelligence Unit–India (FIU–IND).There have been news reports that India is reconsidering its stance amid growing global acceptance, but a promised discussion paper outlining policy framework options for crypto assets —scheduled for June—has still not been the use of virtual assets for terror financing has been 'overall on the increase', according to a report by the Financial Action Task Force (FATF), an intergovernmental body tracking financial crime, released this week.A country with a history of terror financing that can easily weaponise crypto against India is plunging headlong into it. How long must India wait? Pakistan's strategy extends beyond partnerships, with the country exploring bitcoin mining using surplus energy to create a strategic bitcoin reserve. 'Crypto is becoming a channel for strategic financial flows for Pakistan,' says Anirudh Suri, MD, India Internet Fund. 'For countries like Pakistan, aligning crypto policy with US frameworks isn't just diplomacy, it's a transactional pipe to stay useful to America's geopolitical interests.'Suri points out that's not positive for India by any measure: 'India is trying to choke financial flows to terror groups via FATF and IMF diplomacy, and crypto could reopen that tap.'Subimal Bhattacharjee, an independent adviser and consultant on cybersecurity, defence and technology policy, warns of the implications: 'What are the impacts of rogue elements using it? How do we guard our people against that? The answer to everything is in a coherent and clear crypto policy. To put it simply, we have to make it a regulated entity.'Following the Pahalgam terror attack, India's FIU instructed crypto exchanges to closely monitor transactions, specifically from Jammu and Kashmir and other border regions. Exchanges were directed to scrutinise private wallets and private coins used for person-to-person transfers without blockchain notes that there may be arms within Pakistan's government or military establishment that like open crypto channels—enabling a continued flow of funds. 'For a country like Pakistan, maintaining a fluid stance on crypto allows them to either attract financial flows or pursue other strategic objectives,' he says. While Pakistan's approach raises security concerns, Bhutan presents a different model. The Himalayan kingdom has been quietly mining bitcoin since 2020, using abundant hydropower, accumulating enormous reserves of it. The country is integrating crypto into tourism and its upcoming smart city project, and views Bitcoin not merely as a store of value but as a tool to diversify its Gowdara Shivamurthy, an associate fellow with the strategic studies programme at the think tank Observer Research Foundation, says Bhutan's foray into bitcoin mining is driven largely by domestic economic necessity, to diversify beyond tourism and hydropower, and is meant to curb brain drain. Revenues from mining have already helped them shore up foreign reserves and fund public spending—including significant salary hikes for civil India recognises Bhutan's sovereign right to diversify its economy, there are worries, particularly around reduced hydropower exports, and imports of Chinese bitcoin mining companies like Adani have shown interest in setting up data centres there, and how those moves unfold could shape the long-term GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act—currently pending a vote in the US House of Representatives, expected in the week of July 14—aims to set a regulatory framework for stablecoins in the country. But there are plenty of the US president made nearly $57.4 million in 2024 from his cryptocurrency company, World Liberty Financial, according to the latest disclosures. This is before Trump became president for the second time. The company has floated its own stablecoin, are allegations that the GENIUS law would provide even more opportunities to reward buyers of Trump's coin with favours, including tariff exemptions, pardons and government appointments.A case in point — before the US president's visit to West Asia, MGX, a fund backed by Abu Dhabi, said it would make a $2 billion investment using USD1 into Binance, triggering allegations of conflict of interest.'I wouldn't be surprised if other countries now try to exploit this pathway to gain access or soften the stance of the US administration. Under Trump, the line between strict adherence to global norms and personal or commercial interests appears to have blurred,' says of this should worry India. Observers believe US may leverage its influence within FATF to promote GENIUS, with all its loopholes, as the new global standard for crypto regulation. It is a move especially significant for Pakistan, a country previously flagged for terror financing, which could take a leaf out of the GENIUS Kumar, deputy director for future of money at the GeoEconomics Center of Atlantic Council, says the biggest challenge going forward is fragmented regulation. 'Crypto doesn't really listen to borders. So it's not really a domestic problem, it's an international problem that everyone needs to come together on.'But clarity in policy in India would help resolve the current uncertainty, which often undermines consumer protection, and allows legit crypto entrepreneurs—many of whom have moved operations abroad, or shut down—to work within a well-defined framework.'Virtual digital assets or crypto assets have not been defined outside of income tax and anti-money laundering laws in India. The lack of classification under foreign exchange laws, securities laws, payments laws and goods and services tax creates critical ambiguities. This leads to uncertainty for both businesses and consumers,' says Jaideep Reddy, partner at Trilegal.'India needs regulation around the treatment of US dollar-denominated stablecoins, because it's also a concern of capital flight—money flowing into dollars instead of rupees,' says Kumar. 'India would likely want to create some sort of threshold.'As India's neighbours forge ahead with comprehensive crypto strategies, the question posed by the Supreme Court becomes increasingly pressing. The choice is no longer between embracing or rejecting crypto.
Time of India
2 days ago
- Business
- Time of India
Trump backs crypto, Pakistan embraces it. How long must India wait?
A couple of weeks before the Pahalgam attack, something strange happened in Islamabad. Changpeng Zhao, the Chinese-born Canadian businessman and founder of Binance, the world's largest cryptocurrency exchange, agreed to be an advisor to the Pakistan Crypto Council (PCC) in early April. PCC, freshly minted in March, was cobbled together to create a framework for crypto in a country that had until then been notoriously suspicious of digital currencies. At the time, many wondered what Pakistan's motivation was in welcoming crypto, which officials maintained was a tool to attract foreign investment. In the subsequent months and during Operation Sindoor, it became clear that the move had a strategic angle as well. Pakistan, having signed up with World Liberty Financial (WLF), a crypto company linked to US President Donald Trump's family, was also using crypto to gain currency with the White House. That, along with carrots like a Nobel peace prize nomination for Trump , may have influenced the US's tepid pushback on Pakistan during the conflict. On July 9, Pakistan went all in with President Asif Ali Zardari signing an ordinance establishing the Pakistan Virtual Asset Regulatory Authority (PVARA), 'an autonomous federal body empowered to license, regulate and supervise entities dealing in virtual assets (VA)'. That is quite a move for a struggling economy desperate for bailouts from the International Monetary Front (IMF), but the reality is that Pakistan is not alone in embracing crypto. The US is racing to legitimise stablecoins—a type of cryptocurrency pegged to stable assets. Almost 98% of stablecoins are tied to the dollar. India 's neighbour Bhutan has quietly built bitcoin reserves worth $1.3 billion or roughly 40% of the country's gross domestic product (GDP), according to the Wall Street Journal . Countries like Russia, Iran and North Korea have been using it to conduct business, beyond the reach of the international sanctions regime. For countries with a clear agenda—from attracting investment, to sidestepping sanctions, or even currying favour with the world's elite—crypto is becoming a legit play. That has meant that from US to UAE, Singapore to Bhutan, countries have made crypto a part of their foreign and economic policy playbook. The big question: where is India in all of this? A CONSERVATIVE PLAY 'Why does the Centre not come out with a clearcut policy on regulating cryptocurrency?' The Supreme Court's pointed question to Additional Solicitor General Aishwarya Bhati during a May 19 hearing encapsulates India's prolonged struggle with digital assets. The bench, hearing a bail plea in an illegal bitcoin trade case, stated: 'There is a parallel under-market for it and it can affect the economy. By regulating the cryptocurrency, you can keep an eye on the trade.' This wasn't the first judicial nudge. In February 2022, the apex court had similarly pressed the central government to clarify whether cryptocurrency trading was legal in India. The repeated queries highlight a regulatory vacuum that continues to perplex the courts. India's crypto landscape remains in what experts describe as a 'state of flux' where lawsuits involving fraud get dismissed due to 'a lack of legal status for cryptocurrencies in India'. The Reserve Bank of India's concerns about financial stability continue to shape the government's cautious approach. The central bank fears that cryptocurrencies could undermine its control over money supply and pose risks to financial and monetary stability. This, even as the market regulator Securities and Exchange Board of India (Sebi) has reportedly recommended that several regulators oversee trade in cryptocurrencies. The Centre has to take a clear stance, backed by a well-defined policy vision, at a time when the technology is increasingly exploited by hostile actors. Currently, the regulatory framework consists of a flat 30% tax on capital gains and 1% tax deducted at source (TDS) on transactions above Rs 10,000, introduced in 2022. In March 2023, the finance ministry mandated all crypto exchanges operating in India to register with the Financial Intelligence Unit–India (FIU–IND). There have been news reports that India is reconsidering its stance amid growing global acceptance, but a promised discussion paper outlining policy framework options for crypto assets —scheduled for June—has still not been floated. Meanwhile, the use of virtual assets for terror financing has been 'overall on the increase', according to a report by the Financial Action Task Force (FATF), an intergovernmental body tracking financial crime, released this week. A country with a history of terror financing that can easily weaponise crypto against India is plunging headlong into it. How long must India wait? PAKISTAN'S PLANS Pakistan's strategy extends beyond partnerships, with the country exploring bitcoin mining using surplus energy to create a strategic bitcoin reserve. 'Crypto is becoming a channel for strategic financial flows for Pakistan,' says Anirudh Suri, MD, India Internet Fund. 'For countries like Pakistan, aligning crypto policy with US frameworks isn't just diplomacy, it's a transactional pipe to stay useful to America's geopolitical interests.' Suri points out that's not positive for India by any measure: 'India is trying to choke financial flows to terror groups via FATF and IMF diplomacy, and crypto could reopen that tap.' Subimal Bhattacharjee, an independent adviser and consultant on cybersecurity, defence and technology policy, warns of the implications: 'What are the impacts of rogue elements using it? How do we guard our people against that? The answer to everything is in a coherent and clear crypto policy. To put it simply, we have to make it a regulated entity.' Following the Pahalgam terror attack, India's FIU instructed crypto exchanges to closely monitor transactions, specifically from Jammu and Kashmir and other border regions. Exchanges were directed to scrutinise private wallets and private coins used for person-to-person transfers without blockchain visibility. Suri notes that there may be arms within Pakistan's government or military establishment that like open crypto channels—enabling a continued flow of funds. 'For a country like Pakistan, maintaining a fluid stance on crypto allows them to either attract financial flows or pursue other strategic objectives,' he says. BHUTAN MODEL While Pakistan's approach raises security concerns, Bhutan presents a different model. The Himalayan kingdom has been quietly mining bitcoin since 2020, using abundant hydropower, accumulating enormous reserves of it. The country is integrating crypto into tourism and its upcoming smart city project, and views Bitcoin not merely as a store of value but as a tool to diversify its economy. Aditya Gowdara Shivamurthy, an associate fellow with the strategic studies programme at the think tank Observer Research Foundation, says Bhutan's foray into bitcoin mining is driven largely by domestic economic necessity, to diversify beyond tourism and hydropower, and is meant to curb brain drain. Revenues from mining have already helped them shore up foreign reserves and fund public spending—including significant salary hikes for civil servants. While India recognises Bhutan's sovereign right to diversify its economy, there are worries, particularly around reduced hydropower exports, and imports of Chinese bitcoin mining equipment. Meanwhile, companies like Adani have shown interest in setting up data centres there, and how those moves unfold could shape the long-term relationship. GENIUS MOVES OF US The GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act—currently pending a vote in the US House of Representatives, expected in the week of July 14—aims to set a regulatory framework for stablecoins in the country. But there are plenty of worries. Notably, the US president made nearly $57.4 million in 2024 from his cryptocurrency company, World Liberty Financial, according to the latest disclosures. This is before Trump became president for the second time. The company has floated its own stablecoin, USD1. There are allegations that the GENIUS law would provide even more opportunities to reward buyers of Trump's coin with favours, including tariff exemptions, pardons and government appointments. A case in point — before the US president's visit to West Asia, MGX, a fund backed by Abu Dhabi, said it would make a $2 billion investment using USD1 into Binance, triggering allegations of conflict of interest. 'I wouldn't be surprised if other countries now try to exploit this pathway to gain access or soften the stance of the US administration. Under Trump, the line between strict adherence to global norms and personal or commercial interests appears to have blurred,' says Bhattacharjee. All of this should worry India. Observers believe US may leverage its influence within FATF to promote GENIUS, with all its loopholes, as the new global standard for crypto regulation. It is a move especially significant for Pakistan, a country previously flagged for terror financing, which could take a leaf out of the GENIUS law. WHAT INDIA SHOULD DO Ananya Kumar, deputy director for future of money at the GeoEconomics Center of Atlantic Council, says the biggest challenge going forward is fragmented regulation. 'Crypto doesn't really listen to borders. So it's not really a domestic problem, it's an international problem that everyone needs to come together on.' But clarity in policy in India would help resolve the current uncertainty, which often undermines consumer protection, and allows legit crypto entrepreneurs—many of whom have moved operations abroad, or shut down—to work within a well-defined framework. 'Virtual digital assets or crypto assets have not been defined outside of income tax and anti-money laundering laws in India. The lack of classification under foreign exchange laws, securities laws, payments laws and goods and services tax creates critical ambiguities. This leads to uncertainty for both businesses and consumers,' says Jaideep Reddy, partner at Trilegal. 'India needs regulation around the treatment of US dollar-denominated stablecoins, because it's also a concern of capital flight—money flowing into dollars instead of rupees,' says Kumar. 'India would likely want to create some sort of threshold.' As India's neighbours forge ahead with comprehensive crypto strategies, the question posed by the Supreme Court becomes increasingly pressing. The choice is no longer between embracing or rejecting crypto.
Yahoo
3 days ago
- Business
- Yahoo
Binance Aided Trump Crypto Firm Before Founder CZ Sought Pardon
(Bloomberg) -- One of the Trump family's crypto ventures has received key behind-the-scenes help from the world's largest digital-asset exchange, whose founder is a convicted felon now seeking a presidential pardon. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Why Did Cars Get So Hard to See Out Of? Can Americans Just Stop Building New Highways? How German Cities Are Rethinking Women's Safety — With Taxis Denver City Hall Takes a Page From NASA Binance wrote the basic code to power USD1, a stablecoin launched by the Trumps' World Liberty Financial Inc., according to three people familiar with the matter. They asked not to be named because the arrangement was private. Later, Binance's founder and principal owner, Changpeng Zhao, said publicly that he had applied for a pardon. CZ, as he's known, pleaded guilty in 2023 to failing to maintain an effective anti-money-laundering program. The coding work — writing the 'smart contract' that governs how USD1 tokens are created — helped make USD1 available for use in a $2 billion transaction this spring when an investment firm founded by the United Arab Emirates used it to buy a stake in Binance. Now, more than two months since that transaction, more than $2 billion in USD1 — roughly 90% of all coins outstanding — remains in Binance's wallets, according to blockchain data. The assets backing that sum generate interest income, which could reach tens of millions of dollars for the Trumps on an annual basis. Binance also promoted USD1 to its 275 million users, a sought-after benefit among stablecoin issuers. In short, blockchain data, public announcements and accounts from people familiar with the situation show that Binance helped create the coin, helped promote it and took part in its largest known transaction. It's unclear whether Binance or Zhao has received any payment from World Liberty in return. A Binance spokesperson didn't respond to questions about the coding help or investment deal but said USD1 followed the exchange's 'standard listing process.' She noted that Zhao is no longer Binance's chief executive officer, said his decision to apply for a pardon 'is a personal one' and referred questions about it to him. Zhao did not respond to messages seeking comment. A White House spokesperson declined to comment for this story. A spokeswoman for World Liberty didn't respond to specific questions about the company's dealings with Binance, but said in an email, 'your assertions are factually deficient and designed to further a political agenda.' Looming over Binance's interactions with World Liberty are both firms' most famous principals: Zhao, who wants a pardon, and Trump, the only person in the world who can give him one. Critics say the situation creates a conflict of interest for the president. 'We have never had this since the Civil War: a president whose personal financial interests conflicted with his official duties,' said Richard Painter, a professor at the University of Minnesota Law School who served as the White House's chief ethics counsel from 2005 to 2007. 'We haven't had anything even close to this significant.' Previously, the White House has said Trump has no conflicts of interest because he has placed his assets in a trust controlled by his eldest son, Donald Trump Jr. The president has said he plays no role in business decisions or investments. An ethics agreement released before he took office in January says Trump will receive only 'general business updates' about his main company, the Trump Organization, 'and not an accounting of the performance of any specific business or asset.' Trump Jr. celebrated the debut of USD1 in March with a post on X: 'Built in America, backed by real dollars, and designed for everyone. Let's revolutionize finance together.' 'Crypto Capital' Trump, who once called Bitcoin a 'scam,' had a change of heart last year, saying he hoped to make the US the 'crypto capital of the world.' Now, crypto ventures — including World Liberty and a memecoin Trump announced days before his inauguration — have added at least $620 million to his fortune in a span of months, according to the Bloomberg Billionaires Index. Meanwhile, his administration has stepped back from enforcement cases that financial regulators brought against crypto companies during former President Joe Biden's administration. Eric Trump, the president's second-eldest son, has said he grew interested in cryptocurrency after banks began denying services to his family's business. 'The second you start saying something that goes against the system, they'll cancel you, they'll ostracize you, they'll come after you, and it's really amazing,' he said in May at a crypto conference in Dubai. 'That's actually what caused me to find cryptocurrency.' Neither World Liberty nor Binance has described how the companies began talking. Two people with knowledge of the matter said Zhao met with Steve Witkoff, one of World Liberty's co-founders, in December, not long after Trump's election victory, at a Bitcoin conference in Abu Dhabi. By then, Zhao had been out of a federal halfway house in Long Beach, California, for less than three months, having served a short sentence after his guilty plea. His exchange paid more than $4 billion in penalties after authorities accused it of allowing money to 'flow to terrorists, cybercriminals and child abusers through its platform.' A person close to Witkoff disputed that the Abu Dhabi meeting occurred, saying Witkoff doesn't remember it. Trump had tapped Witkoff, a real estate developer, to serve as a key diplomat in his administration. Witkoff has said he'd exit World Liberty by transferring his interest to his adult sons. 'He is working with ethics officials and counsel,' said David Warrington, White House counsel, 'including taking all the legal steps necessary to divest.' The substance of any initial conversations is unclear. But in mid-March, Bloomberg News reported that Binance and World Liberty had begun talks about the possibility of developing a new stablecoin, and The Wall Street Journal reported that Zhao was pressing the Trump administration for a pardon. On social media, Zhao and World Liberty denounced both stories. Within two weeks, however, World Liberty announced that it was creating a new stablecoin that would be traded on a Binance-founded blockchain. And in May, Zhao announced that he had applied for a pardon. 'If they're writing this article,' he said on the Farokh Radio podcast, 'I might as well just officially apply.' As a stablecoin, USD1 is intended to be always worth $1 because each token is supposed to be backed by $1 worth of real assets like cash or Treasuries. Promoters say stablecoins will revolutionize international payments because they can be transferred cheaply and quickly. Critics say they're vulnerable to runs and note that federal authorities previously have linked some stablecoins to illicit activity. No such activity has been linked to World Liberty, which holds $2.1 billion in government money market funds, according to a recent attestation of its reserves. Stablecoins can be lucrative for their issuers, who earn interest on the assets that back them. Tether Holdings SA, issuer of the world's most popular stablecoin, says it made $13 billion in profit last year. When USD1 launched, World Liberty listed only one business partner: Palo Alto, California-based BitGo Inc., which said it would provide the 'underlying infrastructure and user experience' for minting and burning the stablecoins. 'Minting and burning' means creating new tokens when users buy them and destroying them when they're cashed in. A BitGo spokesperson declined to comment. Soon after World Liberty announced its new stablecoin, the BNB Smart Chain that was founded by Binance made the new token part of a broad promotion campaign that offers zero transaction fees on trades. Binance's spokesperson said the campaign is designed 'to promote stablecoins built on BNB Chain.' 'BNB Chain is open to all projects in principle, and particularly welcomes stablecoins,' she said. A BNB Chain representative said USD1 received no preferential treatment. A recent regulatory filing by Circle Internet Group Inc., another stablecoin issuer, suggests how valuable promotional help can be. It said Circle paid Binance $60 million upfront in part to promote its coin, USDC, and agreed to share future revenue with the exchange. Under the two-year deal, Binance also agreed to hold USDC in its company treasury. World Liberty's new stablecoin got off to a slow start, according to blockchain data, which isn't surprising. There are many competitors, some of them well established, and all of them offer similar, if not identical, functionality. But by May, Zhao was involved in the biggest known use of USD1 yet. That month, the investment firm that the UAE founded, MGX, used the stablecoin to purchase a $2 billion stake in Binance. That surprised Circle executives, who were expecting that their stablecoin would be chosen, according to two people familiar with the matter. Using World Liberty's coin meant that Binance lost out on the revenue sharing that's part of its promotional deal with Circle, said the people, who asked not to be named because the matter is private. Zhao posted on X later that determining which currency to use in transactions is 'mostly at the choice of the payer.' MGX didn't respond to a request for comment. Binance wallets still hold more than $2 billion of USD1. At that amount, even a 4% yield would generate $80 million annually. Under the terms of the World Liberty's prospectus, the Trump family would be entitled to about $30 million of it. Meanwhile, Zhao's relationship with US regulators has improved markedly. In May, the Securities and Exchange Commission dropped a lawsuit against Binance that had been filed in June 2023, one of several crypto-focused enforcement actions the regulator has either abandoned or paused. The SEC had accused the exchange of, among other things, lying to regulators about its operations in the US. The lawsuit quoted Binance's former chief compliance officer texting a colleague, 'We are operating as a fking unlicensed securities exchange in the USA bro.' The SEC said it was dropping the case 'in the exercise of its discretion and as a policy matter.' (Updates with BNB Chain representative saying USD1 received no preferential treatment in 22nd paragraph) Trump's Cuts Are Making Federal Data Disappear Will Trade War Make South India the Next Manufacturing Hub? 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