The world of cryptocurrency has always been championed as a bastion of decentralization and freedom from state control. However, a recent sequence of events, centered on the largest crypto exchange Binance and the family of one of the world's most influential politicians, Donald Trump, casts a dark shadow over this ideology. What transpired appears to be not just a business transaction, but a potential merging of a major centralized crypto player with the political establishment—a chilling threat to the very essence of decentralized finance (DeFi).
The Timeline of the Deal: From Fine to Pardon
- November 2023: Guilty Plea and the Multi-Billion-Dollar Fine. The story begins with Binance's co-founder and former CEO, Changpeng Zhao (@cz_binance), known as CZ, and the exchange itself, pleading guilty to violating US anti-money laundering laws and agreeing to pay a staggering fine of more than $4 billion [, ]. CZ stepped down as CEO.
- March 2025: The Trump Family's Stablecoin and the Binance Investment. A little over a year later, World Liberty Financial (WLFI), a company affiliated with the Trump family, announces the launch of its own stablecoin, USD1, which is backed by U.S. Treasuries []. Almost simultaneously, an investment firm from Abu Dhabi, MGX, announces a $2 billion investment in Binance [].
- May 2025: Propping Up the New Coin. It soon becomes clear that the entire $2 billion investment into Binance was paid in USD1 []. This massive capital injection instantly legitimized and capitalized WLFI's new stablecoin. Since USD1 is backed by U.S. Treasuries, as long as Binance doesn't redeem the $2 billion in USD1, WLFI (the Trump family) will earn an estimated $60–80 million a year in yield from those Treasuries. In effect, Binance, an entity fined for compliance failures, became the crucial "client-collateral provider" for a politically connected family's new financial product. In the same month, CZ confirmed that he had applied for a presidential pardon [].
- October 2025: The Pardon. Ultimately, Changpeng Zhao receives a presidential pardon [].
The Kicker: Coincidence or Collusion?
The sequence of events is strikingly synchronized:
- The Trump family's business launches a stablecoin.
- A massive investment in Binance (a key crypto market player) is denominated entirely in this new stablecoin, instantly securing its success and providing income to WLFI.
- A few months later, Donald Trump, whose family benefits directly from this transaction, pardons CZ, who was convicted of a serious financial crime.
Such a series of events raises profound questions about a conflict of interest and potential quid pro quo:
- The Obvious Benefit to the Trump Family: The $2 billion deal with Binance not only legitimized USD1 but also guaranteed WLFI a stable, multi-million dollar annual yield from US government bonds.
- Pardon as Quid Pro Quo? CZ, convicted of a major financial offense, is pardoned by a President whose family is intimately linked to a deal that brought Binance significant funding and capitalized the WLFI stablecoin.
The Price of "Centralized" Crypto
This episode stands in stark contrast to the fate of developers who truly champion decentralization. While CZ, who ran a centralized "crypto casino" that, according to regulators, laundered billions, receives a pardon following a politically beneficial deal, developers like those behind Tornado Cash and Samourai Wallet continue to fight for their freedom in court. Their crime? Writing open-source code that can be used for anonymous transactions, which authorities claim facilitates money laundering.
This highlights a chilling double standard:
- Centralized Giants, with their political connections and market-moving power (like CZ with Binance or Trump with his tweets), can escape severe punishment by cutting deals with the powerful.
- Open-Source Developers, embodying the spirit of decentralization, face criminal prosecution for their code.
The conclusion is clear: In a world where Binance can influence crypto prices, and the political establishment can influence the fates of industry key figures through deals and pardons, the entire ideal of decentralization is under attack. Crypto was not hacked from the outside—it was bought, and perhaps tamed. For anyone who still believes in a world of DeFi free from government control and financial oligarchy, this tandem—politics and centralized finance—should be absolutely terrifying.
References & Further Reading:
