Trump Pardons CZ, Shifts Crypto Oversight to Pro-Innovation CFTC

President Donald Trump's pardon of Binance founder Changpeng "CZ" Zhao has reignited debates over crypto regulation and executive power, marking a pivotal moment for the industry. Zhao, who served a four-month prison sentence after pleading guilty in 2023 to violating U.S. anti-money laundering laws, was fully exonerated in October 2025. The White House defended the decision as an end to the "Biden administration's war on crypto," a narrative underscored by Karoline Leavitt, Trump's press secretary, who highlighted the lack of fraud allegations in Zhao's case, according to Blockchain Magazine. The pardon also aligns with Trump's broader strategy to position the U.S. as a global crypto innovation leader, a goal reflected in his recent nomination of Michael Selig to head the Commodity Futures Trading Commission (CFTC), a Coindoo report.

Zhao's legal troubles began in November 2023, when he admitted to enabling money laundering through Binance's operations. As part of a $4.3 billion settlement with the Department of Justice (DOJ), he stepped down as CEO and paid a $50 million fine. Prosecutors had sought a three-year prison term, but he received just four months in custody. The Trump pardon erased remaining penalties, allowing Zhao to focus on rebuilding his influence in the crypto space. Binance Coin (BNB) surged following the news, rebounding above $1,100 after a prior crash in October 2024, as noted in a Bitcoinist report.

The pardon coincided with Trump's push to overhaul crypto oversight. Selig, a senior adviser at the SEC's crypto task force, is a vocal proponent of innovation-friendly regulation. His nomination to lead the CFTC signals a shift toward consolidating digital asset regulation under the agency, which would oversee spot markets for non-security tokens like Bitcoin and Ethereum. This move follows stalled efforts to appoint Brian Quintenz, a former CFTC commissioner with ties to crypto firm a16z, whose nomination faced industry resistance, according to a Bitget report. Selig's background in bridging SEC-CFTC policies has earned him credibility among regulators and industry players, though partisan divides persist over whether digital assets should fall under securities or commodities law, as that Bitget report observed.

Binance's lobbying efforts, which intensified after Trump's inauguration, played a key role in securing the pardon. The exchange hired Ches McDowell, a Trump ally and lobbyist, in late September 2025, paying his firm $450,000 for September alone. McDowell, a hunting companion of Trump Jr., had previously lobbied for the Trump-backed World Liberty Financial venture, which partnered with Binance on liquidity infrastructure, reported by Live Bitcoin News. Earlier in February, Binance and Zhao also retained Teresa Goody Guillén, a crypto lawyer Trump had considered for SEC chair, who earned $290,000 from the firm, according to Lookonchain. These hires reflect a strategic pivot toward leveraging direct ties to the White House, a tactic that proved effective in softening regulatory scrutiny.

The pardon and regulatory shifts have emboldened Binance's return to U.S. markets. The company, barred from operating domestically after its 2023 settlement, has since focused on global expansion while lobbying for regulatory clarity. Its current CEO, Richard Teng, joined the advisory board of the Digital Chamber, a crypto trade group, in July 2025, signaling renewed optimism, as Politico reported. Meanwhile, the CFTC's expanded role under Selig could streamline oversight, though challenges remain in harmonizing enforcement with the SEC.

As the crypto industry recalibrates, the interplay between political influence and regulatory policy remains central. Trump's administration has positioned itself as a crypto-friendly alternative to Biden-era enforcement, a stance that could reshape the sector's trajectory in 2026 and beyond.