Trump's Crypto Pardon Sparks Firestorm as Khanna Pushes for Trading Ban

Rep. Ro Khanna (D-Calif.) has launched a scathing critique of President Donald Trump's cryptocurrency dealings, alleging the administration is enriching itself through "unprecedented" corruption and pledging to introduce a resolution banning the president, his family, and members of Congress from trading in crypto or accepting foreign funds, according to a Benzinga report. The move follows Trump's controversial pardon of Binance founder Changpeng "CZ" Zhao, a foreign national previously convicted of violating U.S. anti-money laundering laws, and intensifies scrutiny over the Trump family's ties to World Liberty Financial, a stablecoin venture linked to Binance, as noted in a TradingView report.

Khanna, a vocal critic of Trump's financial practices, accused the president of using his office to amass "obscene" wealth, citing Zhao's investment in the Trump-backed stablecoin World Liberty Financial USD (USD1) as a case study, according to Benzinga. The resolution, set to be introduced on Monday, would prohibit the president and his family from engaging in crypto transactions and receiving foreign capital—a direct response to what Khanna called systemic corruption. The Trump family's financial entanglements with USD1 have drawn bipartisan criticism, particularly after Zhao, who was sentenced to four months in prison for regulatory violations, received a full presidential pardon, according to a Cointelegraph article.

Trump defended the pardon during a press conference, claiming he was advised that Zhao's actions "were not even a crime" and that the former administration "persecuted" him, Cointelegraph reported. The decision has sparked a political firestorm, with Democratic lawmakers like Sen. Elizabeth Warren (D-Mass.) condemning it as an act of favoritism. Meanwhile, Binance's lobbying efforts in Washington, including $450,000 paid to Trump-linked operatives and $290,000 to former SEC contender Teresa Goody Guillén, have raised questions about the pardon's motivations, according to a Cointelegraph report.

The controversy underscores broader tensions in the crypto sector. While Trump's executive order to establish the U.S. as a "crypto capital" has drawn optimism from industry leaders like CZ, who pledged to "make a lot of money for the country," critics argue the pardon normalizes leniency for regulatory violations, as reported by Cointelegraph. Legal analysts have also emphasized that a presidential pardon does not exonerate Zhao, leaving his criminal record intact and potentially exposing him to civil liabilities, according to a Cointelegraph analysis.

Khanna's proposed resolution aligns with growing calls for transparency in crypto governance. The congressman, who has previously advocated for Bitcoin's role as a strategic reserve asset, framed the ban as a necessary step to prevent conflicts of interest, per Benzinga. His office highlighted USD1's role in facilitating a $2 billion deal between Abu Dhabi firm MGX and Binance earlier this year, further complicating perceptions of the Trump family's financial independence, as Benzinga noted.

The White House has not commented on the resolution, while Binance issued a statement thanking Trump for "his leadership" in advancing crypto adoption. As the debate over crypto regulation intensifies, Khanna's move signals a potential shift in congressional oversight, with Democrats leveraging the issue to highlight what they describe as Trump's "corrosive" financial practices, according to Benzinga.