Seven Democratic senators have asked U.S. Attorney General Pam Bondi and the Department of Justice to provide details on President Donald Trump’s pardon of Changpeng “CZ” Zhao, the co-founder of cryptocurrency exchange Binance. In a letter published Tuesday, the lawmakers said the pardon “signals to cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity.” The senators — Elizabeth Warren, Chris Van Hollen, Bernard Sanders, Mazie Hirono, Richard Blumenthal, Jack Reed and Jeffrey Merkley — accused Trump of protecting individuals “so long as they enrich him.” They said the move would weaken law enforcement’s ability to deter financial crime and further blur the line between politics and corporate wrongdoing. The letter followed similar criticism from Representative Maxine Waters, the ranking Democrat on the House Financial Services Committee, who said last week that “Trump is doing massive favors for crypto criminals who have helped line his pockets.”
Investor Takeaway
Lawmakers are framing the pardon as a test of U.S. oversight credibility. For the crypto industry, it revives scrutiny over ties between exchanges, politics, and campaign funding.
Alleged Links Between Trump, Binance and Zhao
The senators’ letter highlighted what they described as “troubling connections” between Zhao, Binance and Trump’s business ventures. They cited the launch of World Liberty Financial (WLFI), a decentralized finance platform started by Trump’s family late last year, which has been linked to Binance’s infrastructure. Reports from that period suggested Binance played a role in developing WLFI’s USD1 stablecoin and facilitating introductions for its leadership. Zhao denied involvement in May, saying he had “no part” in the project’s formation. Still, the senators noted that Trump’s pardon came after what they called a “revenue relationship worth millions of dollars” between Binance and the Trump family. According to disclosures cited in the letter, Binance and its affiliates spent $450,000 on Trump-linked lobbyists and $290,000 on legal and political advisors connected to the administration, including former SEC chair candidate Teresa Goody Guillén, who represented Zhao.
Political and Legal Fallout
Trump granted Zhao’s pardon last week, saying during a campaign event that “people told me what he did was not even a crime.” Zhao had pleaded guilty in 2024 to violating the U.S. Bank Secrecy Act by failing to maintain an adequate anti–money laundering program at Binance. He was sentenced to four months in prison and agreed to pay a $50 million fine as part of the plea deal. Critics say the pardon could undermine ongoing Justice Department investigations into crypto-related financial crimes. “This pardon will make it harder for federal law enforcement to fight and deter crime,” the senators wrote, adding that the decision “publicly and flagrantly undermines the work of federal prosecutors.” Legal analysts note that while presidential pardons are constitutionally broad, political backlash could prompt new legislative proposals to limit clemency powers in cases involving campaign donors or political allies.
Investor Takeaway
The controversy adds to market unease around U.S. crypto regulation. While CZ’s legal status is cleared, the political fallout could delay institutional engagement with exchanges tied to ongoing probes.
Next Steps From Lawmakers and Regulators
The senators have asked Bondi and the Department of Justice to clarify whether Trump’s financial or political connections to Binance influenced the decision. They also requested an assessment of how the pardon may affect ongoing or future prosecutions involving crypto exchanges and executives. The Justice Department has not yet responded publicly. Binance declined to comment. Zhao has maintained a low profile since leaving Binance’s top post in 2024, when the company agreed to pay a $4.3 billion settlement to U.S. authorities over sanctions and AML violations. He currently resides in Dubai and retains a minority stake in Binance. For Washington, the dispute comes as digital assets become an increasingly partisan issue. Trump has positioned himself as a supporter of crypto innovation, while Democratic lawmakers continue to call for tougher oversight of exchanges and stablecoins. The clash over Zhao’s pardon is likely to sharpen that divide ahead of the 2026 midterms.