Binance wants American transaction monitors off its exchange, and the Trumps want to know how much Binance might pay for that privilege.
On April 11, the Wall Street Journal (WSJ) dropped a bombshell report on the Binance digital asset exchange’s increasingly cozy relations with the family of United States President Donald Trump and their ever-expanding list of digital asset ventures. There’s a lot to unpack here, but we’ll start with the purported business discussions.
Binance is said to be in discussions with representatives of World Liberty Financial (WLF), the Trump-controlled decentralized finance (DeFi) project, about listing WLF’s recently announced dollar-denominated stablecoin USD1. Binance was tight-lipped following the Journal’s report but a WLF spokesperson told the Journal the goal was to make USD1 “accessible for millions globally.”
USD1 has yet to officially launch but its soft launch on Binance’s in-house BNB Chain (aka Binance Smart Chain) and Ethereum is already generating daily trading volume of over $100 million. A week ago, WLF proposed a plan to airdrop “a small amount” of USD1 to holders of WLF’s ‘governance’ token WLFI in part to “drive initial visibility and awareness of USD1 prior to broader market access.”
USD1 securing a favorable spot on Binance—the leading exchange in terms of trading volume—could allow USD1 to generate billions of dollars in revenue. Stablecoin issuers make their bones by investing the fiat reserves backing their tokens in yield-bearing vehicles such as U.S. Treasury bills. Tether, issuer of the market-leading USDT stablecoin, claims to have made a $13 billion profit last year.
Earlier this month, the prospectus filed by Circle, issuer of the USDC stablecoin, shone light on Circle’s December 2024 ‘strategic partnership’ with Binance to boost USDC adoption. The partnership required Circle to pay Binance $60.25 million upfront, along with a “monthly incentive fee” based on how much USDC Binance kept on its platform. The prospectus also revealed the even greater sums Circle is paying the Coinbase (NASDAQ: COIN) exchange for similarly preferential treatment.
In other words, stablecoins that want to be promoted by prominent exchanges must pay a steep price for that privilege. Which begs the question: what will the Trumps pay Binance to place USD1 on the exchange—or will it be the other way around?
Pardon me… no, really, pardon me!
As far as what Binance wants from Trump, Binance founder Changpeng ‘CZ’ Zhao remains a convicted felon who spent four months in a federal prison. That prison stay following CZ’s guilty plea in the $4.3 billion settlement he and his company reached with federal authorities in November 2023.
The settlement came after Binance admitted violating the U.S. Bank Secrecy Act’s provisions for years, in the process becoming a go-to hub for money laundering, sanctions evasion and terrorist financing.
Last month, CZ denied a different Journal report that said he was seeking a pardon from Trump. However, CZ’s denial took its usual non-specific form, saying only that he hadn’t made any deal (yet), while musing that “[n]o felon would mind a pardon.”
The Journal reported that Binance set up “internal task forces” during the 2024 U.S. presidential election to explore the possibility of a pardon for CZ and a U.S. return for the exchange. Last month’s Journal report stated that Binance was discussing the possibility of the Trumps taking a financial stake in the U.S.-facing Binance.US in exchange for Binance being welcomed back to the U.S. market.
Surprisingly, this latest report doesn’t seem to have improved CZ’s odds of receiving a Trump pardon by April 29. On Polymarket, CZ is currently sitting at only 2%, down from 5% at the start of April. And 2% matches the odds on pardons for FTX founder Sam Bankman-Fried and Roger Ver. The volume of bets placed on the likelihood of CZ’s pardon is also significantly below that of SBF and Ver.
These monitors are messing with our desire to commit further crimes
The Journal’s latest report claimed that Binance CEO Richard Teng and chief legal officer Eleanor Hughes met with U.S. Treasury Department officials last month to discuss the potential removal of transaction/compliance monitors imposed on the exchange as part of its 2023 settlement.
The settlement required Binance to allow two sets of monitors—one reporting to Treasury, the other to the Department of Justice (DOJ)—to have multi-year access to Binance’s inner dealings. The monitors began their work in May 2024 and may have contributed to Binance’s recent willingness to publicly disclose insider trading activities on its platform.
The Binance execs are said to have complained to Treasury about the costs imposed on their operations by the monitors, while also objecting to having to make employees available to answer monitors’ questions.
Binance reportedly insisted that the monitors be lifted because the exchange is no longer the rogue whose law-flouting antics were so vividly detailed in the U.S. federal charges. However, the Journal cited Binance staff saying the exchange wants to “loosen its checks on riskier customers,” suggesting this leopard has no real interest in changing its spots.
A Treasury official confirmed the meeting with the Binance execs, but downplayed it as just one of the many meetings it’s having with crypto operators. Regardless, Binance officials were said to be “optimistic” that Trump will order the department to call off their dogs.
On April 4, Reuters reported that the DOJ had ‘paused’ nearly all of its corporate monitorships as part of an ‘internal review.’ So if Binance can convince Treasury to call off its monitors, there will be no U.S. federal authorities checking what’s going on internally at the world’s largest digital asset exchange.
CZ v JS
An even bigger bombshell in the Journal report was that, as part of CZ’s plea agreement with U.S. federal authorities, he “agreed to give evidence” to prosecutors about Tron founder Justin Sun. Sun has long been rumored to be under investigation by the DOJ for, well, everything. The Journal said it had no information on whether federal probes into Sun were ongoing.
If they are, we can almost guarantee nothing will come of it. The U.S. Securities and Exchange Commission (SEC) recently paused its civil complaint against Sun. That pause came after Sun forged financial ties with Trump by investing $75 million in WLF—most of which ended up in Trump’s pocket—leading to Sun being named a WLF adviser.
In response to the Journal report, CZ issued another non-denial denial, tweeting that “[p]eople who become gov witnesses don’t go to prison. They are protected.” Critics pointed out that CZ could have received 25 years in prison rather than the four months he served, which suggests that CZ offered the feds something juicy in return for this leniency.
Sun tweeted his own rebuttal of the Journal report, saying “I don’t know about the rumors that are currently circulating on the Internet. CZ is my mentor, friend, and benefactor.” Sun added that he and Tron “have always maintained direct and candid communication with CZ and our partners at the Department of Justice, and I have complete trust in every one of them.”
Sun later tweeted that “they always try to use rumors to provoke us and divide us instead of uniting us,” declining to specify who ‘they’ are. Sun also snuck in praise for Trump’s “wise crypto policy leadership” and claimed that Tron’s native TRX token will be “a beneficiary” of Trump’s crypto embrace.
DOJ calls off its dogs
On April 7, U.S. Deputy Attorney General Todd Blanche issued a memo to all DOJ employees titled ‘Ending Regulation by Prosecution.’ Blanche said the DOJ “is not a digital assets regulator” and thus the DOJ “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”
Going forward, the DOJ’s crypto focus will be limited to “prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.” The DOJ “will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”
Specifically, the DOJ “will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations.” So while North Korean crypto thieves like the Lazarus Group will still be watched, the platforms they use to launder their ill-gotten gains appear to be off the hook.
Ongoing DOJ investigations are to be closed and all previously issued policies and directives that conflict with the views expressed above have been rescinded. The National Cryptocurrency Enforcement Team (NCET)—the group set up in 2021 under former President Joe Biden that helped lead the probe that resulted in Binance’s 2023 settlement—was also disbanded.
While crypto bros celebrated Blanche’s memo, other observers noted that Blanche’s memo boils down “if it’s crypto, it’s not money laundering.” Meanwhile, six Democratic senators sent a letter urging Blanche—who served on Trump’s defense team at his 2024 criminal trials—to “reconsider” the decisions in his memo, calling them “grave mistakes that will support sanctions evasion, drug trafficking, scams, and child sexual exploitation.”
It must be said, the DOJ washing its hands of crypto follows similar ‘not our responsibility’ moves by the SEC, the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and more.
Not for nothing did the senators’ letter state their suspicion that “President Trump’s interest in selling his cryptocurrency may be the reason for easing law enforcement scrutiny.”
Trump family crypto earnings nearing $1B
USD1 and WLF are just two elements of the Trump family’s ever-growing digital asset venture portfolio. Trump has also issued multiple series of non-fungible token (NFT) collectibles; launched a memecoin ($TRUMP); announced plans to launch a series of crypto-focused exchange-traded funds (ETFs) via Trump Media and Technology Group; and formed a BTC block reward mining partnership (American Bitcoin Corp) with miner Hut 8 (NASDAQ: HUT).
According to Bloomberg’s calculations, the Trump family’s crypto ventures have so far generated paper gains of nearly $1 billion. These stark conflicts of interest—coming as the administration pushes Congress to approve digital asset market structure and stablecoin legislation that would directly benefit Trump’s crypto projects—are even starting to bother some Republicans, although none of these GOP worrywarts appear brave enough to openly suggest that the president is violating any laws.
On April 2, some prominent Democrat members of Congress sent a letter to the SEC’s then-acting chairman Mark Uyeda—permanent chair Paul Atkins’ nomination was approved by the Senate last week—regarding Trump’s conflicts of interest. The letter asked the SEC to “preserve all records and communications” regarding WLF to give a better picture of how Trump’s WLF ties “may be influencing your and the Commission’s activities.”
The letter doesn’t mince words, saying “the American people deserve to know whether their financial markets are being regulated impartially or whether regulatory decisions are being made to benefit the President’s family financial interests.”
However, since the Dems don’t control either legislative chamber, and Republicans have shown zero interest in reining in Trump’s excesses, the letter will likely serve as nothing more than historical proof that not everyone in Congress found this naked grifting acceptable.
Oh, and the powers behind $TRUMP are set to release another 40 million tokens—around 20% of $TRUMP’s circulating supply, worth around $320 million—on April 18. The total supply of $TRUMP is one billion tokens. (Also set for unlocking, the $MELANIA token issued by Trump’s wife is set to release over 26 million tokens, representing nearly 8% of its total supply.)
$TRUMP is currently trading at around $8.00 after taking a sudden plunge from $8.47 on Monday morning. The token peaked at $73.43 shortly after it was released in January, but the flood of new tokens is expected to put even more downward pressure on this digital Beanie Baby.
Ulbricht speaks, Griffith walks
CZ isn’t the first crypto luminary seeking a Trump pardon and won’t be the first to receive one. Early on in Trump’s second stint as U.S. president, he pardoned Ross Ulbricht, founder of the Silk Road darknet marketplace. Silk Road facilitated BTC-based sales of illegal drugs and weapons, setting an unfortunate precedent for ‘crypto’ as the preferred means of criminal transactions.
On April 10, Ulbricht announced that he’ll make his “first public appearance and speech” since his release from federal prison. Ulbricht will give this speech at the annual BTC Conference, which this year takes place in Las Vegas from May 27-29.
Also angling for a Trump pardon is Virgil Griffith, the Ethereum developer who traveled to North Korea in 2019 to educate the regime on how to use blockchain to evade U.S. sanctions. Since Griffith had been warned in advance by the U.S. State Department not to do this, he was arrested upon his return and ultimately sentenced to 63 months in prison.
Griffith was released from prison last week after serving five years of his sentence. He’ll reportedly spend the next few weeks in a halfway house, after which he’ll be released on parole. Since Griffith violated his bail conditions before he was sent to prison, one assumes the authorities will be keeping a sharp eye on his conduct. That is, unless Trump pardons him, which seems almost inevitable at this point.
NYAG says don’t trust Tether
As Congress works on reconciling the House and Senate stablecoin bills, state-level authorities are advising them to tread carefully when it comes to letting Tether into the fold. As written, the House bill (STABLE) would exempt Tether from U.S. oversight for a two-year period, while the Senate bill (GENIUS) doesn’t envision ever forcing Tether to comply with U.S. rules.
New York Attorney General (NYAG) Letitia James has waded into this swamp, offering federal legislators her office’s experience in identifying the risks that digital assets can present. In an April 8 letter to House and Senate leadership, James warned Congress not to be blinded by industry hype about a golden era of financial innovation.
James urged legislators to require any stablecoin available to U.S. customers to be “backed by the U.S. dollar or treasuries on a one-to-one basis and be issued by companies that have an American presence and are regulated under U.S. laws and subject to federal and/or state oversight.” Moreover, these “dollars and treasuries should be deposited in banks and institutions under U.S. supervision.”
James is speaking from experience, having imposed an $18.5 million penalty on Tether and its affiliated exchange Bitfinex in 2021, while banning both companies from operating in the state. That judgment came after the NYAG discovered Tether had been lying to regulators and the public about having fiat reserves backing its issued USDT on a 1:1 basis, while covering up the loss of $850 million.
Tether mocks rivals, hails Trump
As the stablecoin bills progressed through Congress, Tether stayed mostly quiet. That is, until recently, as an increasingly cocksure CEO Paolo Ardoino began to crow about how Tether appears to be dodging this regulatory bullet.
On April 9, Forbes quoted Ardoino saying it was “important that our voice be heard in the stablecoin bill process.” Ardoino justified this stance by mocking the “very tiny” size of its competitors compared to Tether’s $144 billion market cap—closest rival USDC’s cap is $60 billion—and claiming that Tether’s rivals “don’t represent the actual use cases of stablecoins.” (Money laundering? Pig butchering? Do tell!)
Ardoino may be Italian but he clearly knows how to kiss Trump’s ass as well as any American. After slamming USDT’s rivals, Ardoino praised Trump’s stablecoin plans, saying “I like USD1 very much, and I like the World Liberty Financial guys. I told them ‘I will be happy to be your friend and help you create a product here that is successful.’” Ardoino clarified that he hasn’t met any of the Trumps, nor have there been any talks of financial dealings between Tether/WLF. Yet.
Ardoino also expanded on Tether’s plans to create a new stablecoin specifically focused on the U.S. market. Tether plans to “take a bit of time to really dive deep into the market but we have some ideas on how we can create a great product focused on digital payments.” Hopefully this won’t take as long as it’s taking Tether to submit its reserves to an independent audit, because that’s been over a decade in the making with no tangible progress to date.
Still, you have to hand it to Tether for taking a page out of Binance’s U.S. playbook. Binance launched Binance.US in September 2019 for the express purpose of creating a (seemingly) regulatory compliant U.S.-facing exchange to take the heat off the criminal haven that was Binance.com. For years, Binance denied there was any skullduggery going on with its U.S. offshoot but these claims were eventually exposed as lies.
Now Tether appears to be doing something similar, creating a non-crime-coin to parade in front of U.S. regulators and law enforcement agencies while USDT goes on greasing the wheels of international illegality. CZ must be proud.
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