“My sons are involved in crypto much more than I—me,” Trump said on 60 Minutes. “I—I know very little about it, other than one thing. It’s a huge industry. And if we’re not gonna be the head of it, China, Japan, or someplace else is. So I am behind it 100 percent.”
Did Trump ever meet Zhao? Did he form his own opinion about Zhao’s conviction, or was he merely “told about it”? Trump doesn’t seem to know:
This man was treated really badly by the Biden administration. And he was given a jail term. He’s highly respected. He’s a very successful guy. They sent him to jail and they really set him up. That’s my opinion. I was told about it.
I said, “Eh, it may look bad if I do it. I have to do the right thing.” I don’t know the man at all. I don’t think I ever met him. Maybe I did. Or, you know, somebody shook my hand or something. But I don’t think I ever met him. I have no idea who he is. I was told that he was a victim, just like I was and just like many other people, of a vicious, horrible group of people in the Biden administration.
Trump: “A lot people say that he wasn’t guilty”
Pointing out that Trump’s pardon of Zhao came after Binance helped facilitate a $2 billion purchase of World Liberty’s stablecoin, O’Donnell asked Trump to address the appearance of a pay-to-play deal.
“Well, here’s the thing, I know nothing about it because I’m too busy doing the other… I can only tell you this. My sons are into it. I’m glad they are, because it’s probably a great industry, crypto. I think it’s good… I know nothing about the guy, other than I hear he was a victim of weaponization by government. When you say the government, you’re talking about the Biden government. It’s a corrupt government. Biden was the most corrupt president and he was the worst president we’ve ever had.”
Enlarge/ Former Binance CEO Changpeng Zhao arrives at federal court in Seattle for sentencing on Tuesday, April 30, 2024.
Getty Images | Changpeng Zhao
Binance founder Changpeng Zhao was sentenced today to four months in prison after pleading guilty of failing to take effective measures against money laundering. The billionaire who formerly ran the world’s largest cryptocurrency exchange previously agreed to a plea deal that also required him to pay a $50 million fine.
Forbes estimates Zhao’s net worth at $33 billion. He pleaded guilty to failure to maintain an effective anti-money laundering program.
Zhao’s cooperation with law enforcement was cited by US District Judge Richard Jones as a reason for imposing a significantly lower sentence than was requested by prosecutors, according to The Verge.
“Before handing down the sentence, Jones faulted Zhao for putting growth and profits before complying with US laws,” Reuters wrote. The sentencing hearing was in federal court in Seattle.
Jones was quoted as saying to Zhao that “you had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity.”
US: Zhao willfully violated law
The government’s sentencing recommendation said that “Zhao’s willful violation of US law was no accident or oversight. He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets.”
The US said Zhao bragged that if Binance complied with US law, it would not be “as big as we are today.”
“Despite knowing Binance was required to comply with US law, Zhao chose not to register the company with US regulators; he chose not to comply with fundamental US anti-money-laundering (AML) requirements; he chose not to implement and maintain an effective know-your-customer (KYC) system, which prevented effective transaction monitoring and allowed suspicious and criminal users to transact through Binance,” the US said.
Zhao also “directed Binance employees in a sophisticated scheme to disguise their customers’ locations in an effort to deceive regulators about Binance’s client base,” the US told the court.
Zhao’s sentencing memorandum denied criminal intent. “Generalized knowledge that the Company’s compliance program did not eliminate all risk of criminal activity does not mean that Mr. Zhao knew or intended for any funds to be criminally derived (he manifestly did not),” the filing said.
Zhao traveled to the US from his home in the United Arab Emirates to take responsibility, his legal team’s filing said. “He is a first-time, non-violent offender who committed an offense with no intention to harm anyone. He presents no risk of recidivism. He has appeared in this country voluntarily to accept responsibility,” the plea for lenience said.
Enlarge/ Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ,” in May 10, 2022, in Rome, Italy.
Now that a federal court has approved a settlement with Binance, the world largest cryptocurrency exchange is hoping to move past a money-laundering scandal that forced its founder and CEO, Changpeng Zhao, to resign and overnight drained more than $1 billion in assets from its platform.
Under the settlement, Binance will “disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty” to the Commodity Futures Trading Commission (CFTC), the federal agency announced in a press release.
Additionally, Zhao will personally pay a $150 million civil monetary penalty. According to a plea agreement with the US Department of Justice—which ordered Binance to pay a “historic” penalty of $4.3 billion—Zhao’s previously ordered $50 million fine can be credited under certain terms against the amount that Zhao owes the CFTC.
The CFTC found that Zhao directed Binance to dodge US regulatory requirements and violate Binance’s own terms of use to hide unauthorized US trading on the exchange. Binance did this by soliciting US customers to trade on the platform without being subjected to Binance’s know-your-customer (KYC) procedures.
“Zhao and Binance were aware of US regulatory requirements, but chose to ignore them and knowingly concealed the presence of US customers on the platform,” the CFTC’s press release said. “The order also finds Zhao and other members of Binance’s senior management actively facilitated violations of US law, including instructing US customers to evade compliance controls.”
Among those “aiding and abetting Binance’s violations,” the CFTC said, was Binance’s former compliance-control officer, Samuel Lin. Under a separate order, Lin must pay a $1.5 million civil monetary penalty, the CFTC noted.
As part of the settlement, Binance will no longer allow customers to use sub-accounts to skirt KYC procedures and has agreed to remove all non-compliant accounts from the platform. Moving forward, Binance has agreed to “no longer allow existing sub-accounts, including those opened by prime brokers, to bypass the platform’s compliance controls,” the CFTC said.
Binance must also implement a new corporate governance structure, adding a board of directors with independent members and compliance and audit committees. This structure is intended to prevent Binance from approving suspicious transactions linked to terrorism, child sexual abuse, and ransomware attacks, as well as from violating anti-money laundering and sanctions laws.
In November, when Zhao resigned, Binance said that settling these lawsuits would help the crypto exchange “turn the page,” Reuters reported.
Zhao’s plea agreement prevents him from making any public statements contradicting his acceptance of responsibility for Binance’s schemes, and he has kept his word on that front. Shortly after resigning, Zhao wrote on the social media platform X (formerly Twitter) that he had made mistakes and must take responsibility “for our community, for Binance, and for myself.”
Within one day after Zhao resigned, though, some Binance users immediately did not appear confident in the platform, withdrawing more than $1 billion from the exchange, CNBC reported. A market analyst told CNBC that Binance’s token suffered most from the CEO stepping down.
However, the majority of Binance’s assets—more than $65 billion—remained on the platform, CNBC reported, indicating that Binance is likely big enough to survive this year’s legal storms.
Zhao said he was “proud to point out” that the plea deals “do not allege that Binance misappropriated any user funds” or “that Binance engaged in any market manipulation.” Naming his successor as CEO—Binance’s former global head of regional markets, Richard Teng—Zhao expressed confidence that Teng would “ensure Binance delivers on our next phase of security, transparency, compliance, and growth.”
