Trump pardons Binance's CZ angering the public! The Democratic Party proposes to ban officials from holding or issuing crypto assets.

After President Trump made a controversial pardon for Binance founder CZ, U.S. Congressman Ro Khanna (California Democrat) proposed a new bill to prohibit elected officials from owning or issuing Crypto Assets. He accused the President of engaging in “blatant corruption” and alleged that the convicted money launderer CZ was funding Hamas, Iran, and child abusers, and provided financial support to Trump's family World Liberty Financial.

Karna Accuses of Open Corruption, Money Goes to the White House for Pardons

(Source: Youtube)

On October 27, Karna accused the president of involvement in “blatant corruption” on MSNBC's “Morning Joe” program, claiming that foreign billionaire Zhao Ziyang, who was convicted of Money Laundering, “provided funding to Hamas, Iran, and child abusers.” He also suggested that CZ provided financial support to the cryptocurrency company World Liberty Finance, associated with the Trump family.

“This is too illegal. It's right in front of us,” said Kahn, arguing that lawmakers should be banned from “holding Crypto Assets and accepting foreign funds.” “This is not a technical issue,” he said, “this is a corruption issue. Money goes into the White House, and the White House takes official actions like pardons.” Such blunt accusations are extremely rare in American politics, as they directly question the motivations and integrity of the president.

Karna's accusations are based on a coincidence of timelines. According to a Bloomberg report, after Binance reached a $2 billion deal with the crypto assets company World Liberty Financial, which is supported by the Trump family, Trump's pardon has reignited scrutiny. While the transaction itself may be a legitimate business activity, the subsequent pardon decision raises questions about the connection between the two. Critics argue that this constitutes a “quid pro quo”: CZ invests in the Trump family business, and Trump pardons CZ's crimes.

Khanna's comments were later shared on his official YouTube channel, incorrectly describing some facts of the Zhao Lijian case. The former CEO of Binance reached a $4.3 billion settlement with the U.S. Department of Justice last year, admitting to committing Money Laundering, but only served four months in prison instead of the four years Khanna claimed. This factual inaccuracy undermines the credibility of Khanna's accusations, but the core argument—Trump's pardon related to money transactions—still sparks widespread discussion.

Three Core Points of the Accusations Against Karna:

Funding Connection: CZ invests in World Liberty Finance, and the Trump family profits from it.

Pardon Exchange: Immediate pardon received after investment raises questions about timing.

Foreign Influence: CZ, as a foreign citizen, influences U.S. political decisions through money.

The $4.3 billion settlement amount is one of the largest fines against an individual in U.S. judicial history. CZ admitted that under his leadership, Binance failed to establish effective anti-money laundering (AML) procedures, allowing criminal organizations and terrorists to launder money through Binance. The Department of Justice accused Binance of facilitating over $4 billion in illegal transactions, including transactions with sanctioned countries. CZ was released after serving only four months, a sentence considered extremely light in the industry, given the severity of the crimes and the scale of the amounts involved.

Proposal to Ban Legislators from Holding Coins, Expanding the 2023 Stock Ban

This congressman stated that he intends to introduce this bill this week as an extension of the 2023 bill to prohibit congressional stock trading, which aims to ban members of Congress and senior officials from trading individual stocks. The bill has been stalled in committee but has helped spark broader bipartisan discussions on strengthening the financial ethics of public officials.

The introduction of the bill to prohibit stock trading by Congress in 2023 stems from several scandals involving lawmakers suspected of insider trading. Some lawmakers engaged in stock trading after obtaining non-public information, gaining improper benefits. Although these actions may technically not violate existing laws, they severely undermine public trust in Congress. The proposal to ban stock trading by Congress received some bipartisan support, but ultimately stalled in committee, primarily because some lawmakers believe it overly restricts individual property rights.

Kanna stated that his new proposal will reflect these principles, requiring lawmakers to divest from digital assets or place them in a blind trust to prevent conflicts of interest. A “blind trust” is a special asset management arrangement where the asset owner hands over assets to an independent trustee for management, without participating in investment decisions or knowing the specific holdings. This arrangement is often used for high-ranking public officials to avoid conflicts of interest.

The logic behind including Crypto Assets in the ban is its direct relationship with policy-making. Congressional members involved in formulating Crypto Assets regulatory laws may lean towards positions that favor their own financial interests rather than the public interest if they simultaneously hold a large amount of Crypto Assets. For example, a member who holds a significant amount of Bitcoin may oppose strict Crypto regulation, while a member who invests in DeFi protocols may advocate for legislation favorable to DeFi.

This move marks the latest political impact of Trump's decision to pardon Zhao Ziyang, which has drawn sharp criticism from the Democratic Party and moral oversight agencies. Once enacted, the proposal by Khanna would make crypto assets the latest category of assets banned by federal lawmakers, highlighting the growing unease in Washington over the intersection of politics, money, and digital assets.

CZ Plans to Return to the U.S. After Binance's Pardon

According to a report by Bloomberg, after President Trump pardoned Binance founder CZ, Binance is exploring ways to re-enter the U.S. market. The exchange is weighing various options, such as merging its U.S. branch with its global platform or allowing its main exchange to directly serve U.S. users.

CZ was pardoned by Trump in 2023 after pleading guilty to violating money laundering laws, but the pardon sparked scrutiny again after a $2 billion deal with Binance and the crypto assets company World Liberty Financial, supported by the Trump family. This pardon removed the previous legal barriers that restricted his participation in Binance's operations. Legal experts indicated that this move effectively restored CZ's ability to participate in business decisions, providing a significant boost to the company's leadership as it aims to re-enter the U.S. market.

Binance was once the dominant player in the U.S. market, but after reaching a settlement with the Department of Justice in 2023, it was forced to significantly scale back its U.S. operations. As part of the settlement agreement, CZ stepped down as CEO, and Binance's U.S. branch operates separately from the global platform and is subject to strict compliance oversight. Now, with CZ receiving a Trump pardon, these restrictions may be reevaluated.

CZ's net worth has reached 61.4 billion USD, making him one of the most powerful figures in the Crypto Assets space, overseeing an ecosystem with 8.7 billion USD in on-chain assets. His influence comes not only from his wealth but also from Binance's dominant position in the global Crypto Assets market. Binance is the largest Crypto Assets exchange in terms of trading volume, with tens of millions of users. If Binance returns to the US market, it will pose a serious threat to domestic Crypto Assets exchanges.

This pardon comes at a time when Trump continues to advance into the digital asset industry. According to reports, his family has earned over $1 billion in revenue from Crypto Assets companies. This combination of politics and business has sparked unprecedented conflicts of interest controversies. On one hand, Trump, as president, formulates policies that impact the entire encryption industry, while on the other hand, his family business profits from this industry, making the ethical issues surrounding this dual role evident.

Feasibility and Controversy of Crypto Assets Ban

The feasibility of the Kanai proposal faces multiple challenges. The first is political resistance. The Republican-controlled House of Representatives is unlikely to support legislation directly targeting Trump's pardon decision. Even within the Democratic Party, there may be lawmakers who believe the ban excessively restricts personal property rights. The second is the difficulty of enforcement. The anonymity and decentralized nature of Crypto Assets make regulation and tracking extremely difficult. Lawmakers may hold Crypto Assets through family members or agents to circumvent the ban.

Additionally, there are issues with the definition of the scope of the ban. Does it prohibit all Crypto Assets, including Bitcoin, Ethereum, and stablecoins? Does it prohibit participation in DeFi agreements or holding NFTs? These details need to be precisely defined; otherwise, it will leave a lot of gray areas. Furthermore, how will the situation be handled for lawmakers who already hold Crypto Assets before the bill takes effect? Forced liquidation could lead to market volatility and legal challenges.

From a principled perspective, Karna's proposal touches on a fundamental issue: the balance between the property rights of public officials and the public interest. Completely prohibiting legislators from holding certain types of assets may excessively restrict their personal freedom, but not imposing any restrictions could lead to conflicts of interest and corruption. Blind trust is a compromise solution, but its operability in the field of Crypto Assets still needs to be verified.

For the crypto industry, this proposal sends out complex signals. On one hand, it shows that the influence of Crypto Assets in Washington has grown to the point where specialized legislation is needed. On the other hand, it highlights the negative perception caused by the entanglement of Crypto Assets with political money. If lawmakers are prohibited from holding Crypto Assets, it may affect their understanding and sympathy towards the industry, which could hinder the development of reasonable regulatory policies.