Key Points:
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Seven Senate Democrats have demanded DOJ clarification on President Trump’s pardon of Binance founder Changpeng Zhao, calling it a corrupt misuse of power.
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Lawmakers allege financial links between Trump, Binance, and Zhao, including support for the Trump family’s DeFi venture, World Liberty Financial.
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The pardon has reignited debate over crypto’s influence in U.S. politics, fueling concerns about law enforcement independence and regulatory credibility.
A group of seven Senate Democrats is demanding answers from the U.S. Department of Justice (DOJ) and Attorney General Pam Bondi over President Donald Trump’s controversial pardon of Binance co-founder Changpeng “CZ” Zhao, calling the decision a “corrupt act” that undermines federal law enforcement and the integrity of the justice system.
In a letter sent Tuesday, the senators argued that the pardon sends a dangerous signal to executives in the cryptocurrency sector, suggesting that “they can commit crimes with impunity if they align with the president’s interests.” The lawmakers also alleged that the pardon may have been influenced by financial and personal ties between Trump and Binance, raising questions about political favoritism in high-level legal decisions.
The letter adds to mounting political pressure following Trump’s move to exonerate one of the crypto industry’s most prominent figures — just months after Zhao pleaded guilty to violating the U.S. Bank Secrecy Act for failing to implement an effective anti–money laundering (AML) program at Binance.
Lawmakers Call Pardon a “Signal of Corruption”
The senators — Elizabeth Warren, Bernie Sanders, Chris Van Hollen, Mazie Hirono, Richard Blumenthal, Jack Reed, and Jeffrey Merkley — warned that Trump’s decision “will make it harder for federal law enforcement to fight and deter crime.”
Their statement comes after Representative Maxine Waters, the top Democrat on the House Financial Services Committee, accused Trump earlier this week of “doing massive favors for crypto criminals who have helped line his pockets.”
The coordinated backlash reflects deep partisan divides over Trump’s approach to crypto regulation. While Trump has recently championed pro-digital asset policies, including pardoning figures like Zhao and advocating for the Digital Asset Market Clarity Act, Democrats have portrayed his stance as an invitation to corporate misconduct.
“The pardon signals to cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity,” the senators wrote. “It rewards criminal activity so long as it enriches the president and his allies.”
Alleged Links Between Trump, CZ, and Binance
The letter also details alleged financial connections between Trump and Binance-linked entities. Reports suggest that Binance provided indirect financial support to World Liberty Financial (WLFI) — a decentralized finance (DeFi) platform launched by Trump’s family in late 2024.
Lawmakers claim that Zhao facilitated introductions for WLFI executives and that Binance technology may have been used in developing the WLFI stablecoin, USD1. Though Zhao publicly denied these allegations in May, the senators argue that the timing of his pardon raises serious ethical concerns.
“After Mr. Zhao’s company provided President Trump and his family with a revenue stream worth millions of dollars, President Trump pardoned him for criminal activity that he admitted to conducting,” the letter states.
Further scrutiny has focused on a reported $740,000 in lobbying expenditures tied to Binance and Trump-affiliated operatives. This includes $450,000 to Trump-linked lobbyists and $290,000 to Teresa Goody Guillén, Zhao’s former legal counsel and one-time nominee for SEC chair under the Trump administration.
Law Enforcement Concerns and Market Fallout
The DOJ has not yet commented on the senators’ letter. However, legal experts warn that Trump’s pardon could set a troubling precedent. “Presidential pardons have always been discretionary, but this one directly interferes with ongoing financial compliance efforts,” said Jeffrey Cohen, a former DOJ prosecutor specializing in corporate crime.
The crypto market reaction has been mixed. While Binance Coin (BNB) briefly rose 3.2% to $689 following news of the pardon, analysts attributed the rally more to short-term speculative trading than confidence in Binance’s regulatory outlook. Bitcoin (BTC), meanwhile, held steady around $115,500, suggesting broader market stability despite political turbulence.
Investor sentiment, however, remains cautious. “The political polarization around crypto regulation introduces a new layer of uncertainty,” said Lydia Park, a digital policy analyst at Chainalysis. “Investors are now factoring in not just macroeconomic risk, but political risk — especially when enforcement can be reversed overnight.”
What’s Next for CZ and Binance
Zhao, who served four months in federal custody earlier this year before his release, has publicly thanked Trump, calling the pardon “a second chance to contribute to global financial innovation.” He remains barred from holding executive positions in U.S.-regulated entities.
For Binance, the controversy comes as it continues efforts to rebuild trust with regulators following a $4.3 billion settlement with the DOJ and Commodity Futures Trading Commission (CFTC) in 2024.
The Senate inquiry may not reverse the pardon, but it underscores the deepening intersection of politics, regulation, and power in the digital asset space — a battleground likely to shape the next phase of crypto governance in Washington.
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