Lawmakers Link Binance Pardon to Trump Stablecoin Deal, Demand Investigation

Binance, the world's largest cryptocurrency exchange, has distanced itself from a $2 billion investment deal with Abu Dhabi's MGX that utilized USD1, a stablecoin tied to Donald Trump's World Liberty Financial (WLFI). CEO Richard Teng denied the exchange's involvement in selecting USD1 for the transaction, emphasizing that the decision was made independently by MGX, as Binance.US pushed back. The controversy has intensified scrutiny over potential conflicts of interest following Trump's controversial pardon of Binance's former CEO, Changpeng "CZ" Zhao, with one report noting that Binance CEO denied involvement.

The MGX investment, announced in March 2025, has drawn political fire due to USD1's ties to Trump's crypto ventures. Teng told CNBC that MGX chose to settle the deal in USD1, and Binance did not influence the decision. He added that USD1 was already listed on multiple exchanges prior to Binance's inclusion, framing the move as routine business. However, reports from The Wall Street Journal and Bloomberg suggest Binance provided technical support for USD1's infrastructure.

Lawmakers, including Senators Chris Murphy and Elizabeth Warren, have accused Binance and Trump of corruption, arguing that the pardon and USD1's adoption were politically motivated. Murphy labeled the White House a "24/7 corruption machine" in a social media post, linking the pardon to Binance's promotion of Trump-linked crypto assets. Binance.US denied the allegations, stating that USD1 and WLFI underwent standard listing procedures and were approved by over 20 exchanges, including Coinbase and Kraken.

The pardon of CZ, who pleaded guilty to criminal money laundering violations and paid $50 million in fines, occurred just days before Binance.US began offering USD1 to U.S. customers, according to Coinpaper. The timing has fueled speculation about quid pro quo arrangements, with critics citing $860,000 in lobbying expenses by Binance to secure the pardon. Trump, however, has defended the decision, calling it a matter of fairness and denying personal ties to Zhao.

The incident highlights the growing intersection of cryptocurrency, politics, and regulation. USD1, pegged to the U.S. dollar and backed by Treasuries, aims to facilitate global transactions but faces ethical questions due to its political affiliations. Teng's insistence that Binance operates without political bias contrasts with lawmakers' calls for investigations into potential conflicts of interest.

As stablecoins become central to digital finance, the case underscores the challenges of maintaining transparency in an industry still grappling with regulatory frameworks. Binance's stance could influence broader debates over crypto governance, particularly as the U.S. crypto market structure bill nears passage, according to CryptoDaily. For now, the controversy remains a focal point for both the industry and Washington, with implications for how stablecoins are perceived and regulated in the future.