Pardon or Pay-to-Participate? Trump’s Cryptocurrency Decision Ignites Regulatory Divide

President Donald Trump’s decision to grant clemency to Changpeng "CZ" Zhao, the founder of Binance, has sparked a worldwide discussion about the regulation of cryptocurrencies, the influence of politics, and the direction of the U.S. digital asset sector. Announced on October 23, 2025, this action represents a significant change in the federal government’s stance on digital currencies. Both detractors and advocates are describing it as a symbolic conclusion to what the

administration refers to as the "Biden administration’s war on crypto," according to information from .

In 2023, Zhao admitted guilt to failing to implement a robust anti-money laundering (AML) system at Binance, resulting in a four-month prison sentence and a $50 million penalty. The platform itself reached a $4.3 billion settlement with U.S. authorities—the largest fine in crypto history—for breaches such as sanctions violations and operating without proper licensing, as detailed in

. Despite these sanctions, Trump’s pardon has faced intense scrutiny, with many pointing to Zhao’s lobbying for Trump’s personal crypto interests, including , a stablecoin initiative associated with Trump’s family, as covered by .

The White House has stood by the pardon, with Press Secretary Karoline Leavitt arguing that Zhao was "overly prosecuted" by the previous administration and that the pardon demonstrates Trump’s dedication to reducing regulation, as previously reported by Coinpaprika. Trump stated that the decision was supported by "many very good people" who believed Zhao’s conduct was not criminal, according to

. Nonetheless, critics such as Rep. Maxine Waters have accused the administration of engaging in "pay-to-play corruption," referencing a $2 billion investment from MGX into Binance using Trump’s stablecoin, as mentioned in .

The pardon has already triggered immediate reactions in the market. Binance’s own token,

, jumped 15% within a day of the news, and briefly climbed to $19,000, as reported by . Some experts believe this could open the door for Binance’s return to the U.S. market, though regulatory barriers persist. Ian Weisberger, CEO of CoinRoutes, described the pardon as potentially "transformative for crypto in America," according to , while others cautioned against excessive political involvement.

Zhao, who still holds a majority stake in Binance, has voiced his appreciation for the pardon and promised to help Trump realize his vision of making the U.S. the "crypto capital," as reported by

. The move has also led to speculation about possible pardons for other prominent crypto leaders, such as FTX founder Sam Bankman-Fried, who recently alleged his 2022 arrest was politically driven, as noted by TradingView.

As the controversy continues, the pardon highlights the deepening ties between digital assets and politics, with Trump’s administration presenting itself as a proponent of decentralized finance, while critics warn of weakened oversight and ethical concerns.