Binance Aids Trump-Tied Firm in Stablecoin Launch Amid Political Scrutiny

Cryptocurrency exchange Binance has been reported to have played a significant role in the creation and promotion of the stablecoin issued by World Liberty Financial (WLF), a crypto business with ties to the family of the former US President Donald Trump. Binance assisted in developing the code behind WLF’s USD1 stablecoin, which was launched on March 4. This collaboration raises questions about potential conflicts of interest and the use of political influence for business gain.

The involvement of Binance in WLF’s stablecoin project became more apparent when an Abu Dhabi-based investment firm, MGX, announced a $2-billion investment in Binance on March 12. Eric Trump, one of WLF’s co-founders, confirmed in May that the company would use USD1 to settle this investment. As of the latest reports, 90% of all the USD1 coins used in the transaction remained in Binance’s wallets, potentially generating substantial interest for Trump and his family.

The relationship between Binance and WLF is particularly noteworthy given the legal and political context. Changpeng “CZ” Zhao, the former CEO of Binance, pleaded guilty to one felony count as part of a settlement with US authorities in 2023. Zhao had already served four months in prison and, in May, expressed his intention to seek a presidential pardon from Trump. Such a pardon could potentially allow Zhao to return to a managerial or operational role at a US crypto business, although he had not publicly commented on the report at the time of publication.

The political implications of this collaboration are significant. Trump’s crypto ventures, including World Liberty Financial and its stablecoin, have been under scrutiny from many lawmakers. The made several campaign promises suggesting that he would tailor policies for the crypto industry. Among his financial entanglements were contributions from crypto executives who supported his campaign and the launch of his memecoin Official Trump (TRUMP).

The regulatory landscape for stablecoins is also evolving. Republican leaders in the House of Representatives are expected to consider three crypto bills, including legislation to regulate payment stablecoins in the US. The GENIUS Act, which has already passed the Senate, is expected to receive a floor vote in the House soon. Though Democrats in the Senate initially stopped a crucial vote for the stablecoin bill, citing Trump’s crypto interests, it ultimately passed with bipartisan support. It remains unclear whether the bill will have enough support to pass in the House, where Republicans also hold a slim majority. Trump has suggested that he would immediately sign an unamended bill if it is passed.

The development of USD1 by World Liberty Financial, with the technical support of Binance, represents a significant step in the evolution of stablecoins. However, the reported relationship between one of the world’s largest crypto exchanges and a business closely tied to the former US president raises questions about potential conflicts of interest and the use of political influence for business gain. The ongoing scrutiny and regulatory developments in the crypto industry will continue to shape the future of stablecoins and their role in the financial ecosystem.