Changpeng Zhao’s contributions to the rise of World Liberty Financial are key.
Author’s note: This is the second in a series of five posts on the financial ties that have publicly emerged between President Trump and the regime of the United Arab Emirates. See part 1.
As forecast in the first post in this series, let’s turn to Changpeng Zhao, known to his crypto confederates as “CZ.”
Even before the Wall Street Journal’s recent reporting on the Trump-UAE crypto enterprise in which Zhao played a vital role, we already knew some of the story: I wrote about it last autumn and our Jim Geraghty did his usual stellar reporting on the topic.
Zhao, a Chinese-born Canadian billionaire, is the founder of Binance, the world’s biggest cryptocurrency exchange. In 2023, he was convicted of money laundering and eventually served about four months in prison. Binance was also convicted, subjected to more than $4 billion in fines and forfeitures, and was banned from operating in the United States. Zhao pleaded guilty, and the platform accepted the severe penalties and sanctions because the government’s case was overwhelming. As the Justice Department put it, Zhao turned Binance into a covert funding channel for “terrorists, cybercriminals and child abusers.”
And yet, President Donald Trump pardoned him. While it’s not a sure thing, the pardon, in wiping out Zhao’s criminal convictions, opens the possibility that Binance could be reinstated for U.S. operations. At the very least, the pardon bolsters Zhao’s chances of qualifying to do business in other markets, where Binance still faces licensing challenges. Places such as the UAE, where Zhao now lives and enjoys warm relations with the royal family — crypto enthusiasts. It’s the country he and his hosts would like to see Binance make its global hub.
The pardon was scandalous. Persisting in Trump loyalty at the expense of their own credibility, Republicans in the Senate and House dutifully blocked Democratic resolutions of condemnation; but there was more grumbling than usual. It induced the president to bleat that he didn’t even know Zhao and was just trying to correct a Biden “witch hunt.” The stubborn fact remained that Zhao had admitted his crimes in a plea deal, as did Binance in accepting the crushing settlement.
Naturally, Trump didn’t mention Zhao’s key contributions to the rise of World Liberty Financial (WLF), whose website refers to the president as “Co-Founder Emeritus,” the same title given to his Middle East envoy, Steve Witkoff. (The fine print says they were “removed upon taking office” — hence the “emeritus” touch . . . which doesn’t stop WLF from brandishing their photos (the president’s is first) under the heading “Meet our team.”
To recap, WLF is the Trump family crypto venture. Crypto is an opaque business centered on a dubious value proposition: digital currency that (as David Bahnsen brilliantly explains) is unstable and therefore (a) periodically crashes after flying high; and (b) is unsuited to become a common medium of exchange (though its comparative anonymity, relative to regulated financial markets and transactions, makes it attractive to criminals).
The murky crypto business, then, is reminiscent of the Clinton Foundation’s “philanthropy” and the Biden family’s sale of “consultancy” and “networking.” That is to say, crypto is a useful artifice to enable the well-heeled — including foreign regimes and their operatives — to funnel huge amounts of money to influential politicians in circumvention of federal law (campaign finance, bribery, gratuity, etc.). As House Oversight Committee Chairman James Comer (R., Ky.) tirelessly explained to the nation while it was a Democratic president’s self-dealing at issue, family members are often screens for such shenanigans, especially if they can be portrayed as titans of industry.
By September 2024, it appeared likely that Trump would win the presidential election that was just weeks away. He picked that propitious time to found WLF — along with Witkoff, his golf buddy, fellow globe-trotting real estate developer, and soon-to-be Middle East emissary.
The party line is that these “co-founders emeriti” have utterly nothing to do with WLF operations — perish the thought! — even as they shape foreign and commerce policy in a way that just happens to line WLF’s pockets, and thus their own. Case in point: In claiming not to know Zhao, Trump said he was just some guy Eric and Don Jr. knew from the “huge” crypto industry, which, the president said, “I know very little about” . . . notwithstanding that, according to Forbes, it was mainly through crypto that Trump had already added more than $3 billion to his net worth by just the eighth month of his second term — and that doesn’t count the Qatari “palace in the sky.”
Instead, we’re to believe that WLF is a totally private enterprise, wholly walled off from the government, stewarded by the two men’s sons — mainly, Eric Trump and Zach Witkoff — with the help of such dodgy associates as Chase Herro (who has proclaimed himself the “dirtbag of the internet,” not without reason) and Zak Folkman (aka “ZMoney,” former entrepreneur of Date Hotter Girls LLC — under an alias, Zack Bauer). Yes, foreign wealth is being helicopter-dropped on WLF because the international market can’t get enough of these guys’ acumen; it has nothing whatsoever to do with the co-founder-emeritus-in-chief who makes crypto policy, pardons crypto felons, and shuts down the Justice Department’s cryptocurrency fraud investigations.
I won’t rehash WLF’s sundry crypto ventures (see my posts from last spring, here, here, here, and here). Let’s focus on just one: stablecoin.
Stablecoin is digital currency that seeks to solve crypto’s instability problem by mooring its unit value to that of a common currency. WLF has produced a stablecoin, which it calls USD1 and says is pegged to the U.S. dollar. That is, if the system works properly, purchasers should be able redeem the coins at or near $1 each.
In important ways, the stablecoin business is analogous to banking: Purchasers get digital coins that they can hold (like bank accounts), invest (usually on an exchange, such as Binance), or spend (not easy to do for everyday transactions because most vendors do not accept crypto). The money that purchasers pay to the coin issuers is akin to bank deposits: Issuers plow it into treasury bonds and similar securities — a very lucrative business at scale. Between their investment capital, the deposits, and earnings generated by the deposits, the issuers hope to have the flexibility to manage the total number of coins (those in circulation, plus those the issuer holds or newly mints) to keep the coin tied to the dollar (give or take fractions of a cent).
When is the best time to start a stablecoin enterprise? I know you’ll be shocked, but WLF decided that about two months after Trump’s inauguration as president would be a splendid time for the launch. USD1 was thus rolled out in March 2025.
Remember, WLF had only started six months earlier, and while it dabbled in “meme coins” and “tokens,” it had no experience in the complexities of operating a pegged currency in a dynamic economy. So how did the Trumps and Witkoffs pull it off? According to the Wall Street Journal, they have Zhao to thank. His Binance platform “deployed a team of over a dozen engineers to build the technology behind the [USD1] currency,” people familiar with the project told the paper. The team included Binance’s “Hong Kong-based stablecoin chief to build the blockchain technology.”
As we’ll see in the next post, that wasn’t the half of it — or, more accurately, even half of the half.
