US Senate Democrats Demand Probe into Trump’s CZ Pardon

Key Insights:

Seven Democratic senators sent a letter demanding a probe into Trump’s pardon of CZ.

The senators say the pardon may embolden white-collar crime in crypto.

Trump’s financial ties to CZ-linked World Liberty Financial raised ethical concerns.

The letter outlines concerns over how the pardon weakens future federal enforcement.

Senators demand answers from the DOJ and Treasury by November 4, 2025.

U.S. Senate Democrats have launched an official inquiry into former President Donald Trump’s decision to pardon Binance founder Changpeng Zhao (CZ), raising alarms over potential conflicts of interest tied to financial dealings between Zhao and Trump-affiliated entities. The move comes amid growing concerns that the pardon could set a dangerous precedent for white-collar crimes in the crypto sector.

In the letter dated October 28 and addressed to U.S. Attorney General Pam Bondi and Treasury Secretary Scott Bessent, seven Democratic Senators led by Elizabeth Warren called for an investigation into the controversial pardon. The letter accused Trump of using presidential powers to shield a convicted financial criminal in exchange for personal and political gain.

US Senate demand probe on Trump's CZ pardon. Source

“The pardon signals to cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity, so long as they enrich President Trump enough,” the letter stated. “This undermines the work of federal law enforcement and could make it harder to deter future financial crimes.”

In 2023, Binance pleaded guilty to multiple federal charges, including violations of anti-money laundering (AML) and sanctions laws. The crypto giant was ordered to pay more than $4 billion in penalties. 

As part of the settlement, the firm agreed to enhance its compliance infrastructure and appoint an independent monitor. CZ also pleaded guilty to failing to maintain an effective AML program and received a four-month prison sentence.

Federal authorities, including the DOJ, Treasury, and the Commodity Futures Trading Commission (CFTC), jointly coordinated the legal action. At the time, the case was lauded as a major step toward crypto industry accountability, reinforcing that U.S. law applies even to globally dominant digital finance players.

Financial Ties and Trump’s “Crypto President” Persona

Also, senators pointed to a series of financial engagements between Binance and Trump-linked ventures following CZ’s release from prison. In September 2024, Trump announced the launch of a new crypto firm, World Liberty Financial. That same month, Zhao was released from prison and reportedly retained a 90% stake in Binance.

By November, Trump after branding himself as the “crypto president” during the campaign won re-election. Reports also emerged of a private meeting between Zhao and real estate developer Steve Witkoff at the Bitcoin MENA 2024 conference in Abu Dhabi.

Further deepening suspicions, they alleged that Binance may have written the code for USD1, the stablecoin issued by World Liberty Financial. The letter suggested these connections could have influenced Trump’s decision to grant a pardon in return for business favor and financial backing.

The senators argued that Trump's action not only undermines public trust but directly challenges the integrity of the rule of law. “It appears that corporate criminals can violate the law, be found guilty, and face criminal consequences but if they help the President enough, they can be cleared of wrongdoing,” the lawmakers noted.

US Lawmakers Demand Answers

As part of their oversight duties, the senators posed a set of direct questions to the Department of Justice and the Treasury. These include:

• What effect will Trump’s pardon of Zhao have on current and future white-collar criminal prosecutions?

• How will it impact the crypto industry’s compliance with U.S. financial laws?

• Does the pardon send a discouraging message to law enforcement agencies tasked with prosecuting financial crimes?

• Did Trump’s financial ties to Zhao influence his decision to grant clemency?

The inquiry demands answers by November 4, 2025, suggesting a swift timeline for response and potential follow-up actions by Congress.

Industry Backlash and Allegations of Collusion

The Senate’s letter follows a wave of criticism from key voices in the crypto and investment community. Senator Warren slammed the pardon as a “kind of corruption” and warned that it legitimized the dangerous intersection of wealth and political power.

Warren slams CZ's pardon. Source

Also, Prominent Ethereum investor and venture capitalist Adam Cochran echoed these sentiments in a viral thread on X. He accused Trump and Zhao of orchestrating “the clearest case yet of pay-for-crime,” pointing to evidence that Binance enabled illicit activity by sanctioned groups and then leveraged political connections for legal absolution.

Cochran alleged that after CZ’s release, Binance partnered with Trump’s firm, World Liberty Financial, collaborated with Dominari Holdings (linked to Trump’s sons), and funded these ventures through a crypto incubator called YZi Labs. He concluded that the pardon was not just a political decision but a financial arrangement.

How The Pardon Unfolded

Rumors about a potential pardon for CZ began circulating in early 2025, initially dismissed as baseless chatter on crypto forums and social media. However, speculation intensified when media outlets reported that Trump’s family had engaged in informal talks with Binance representatives.

In March, The Wall Street Journal confirmed that back-channel discussions were underway. By May, CZ admitted to submitting a formal pardon request, contradicting earlier denials of negotiation.

Senators acted quickly. On May 14, Warren and others sent a letter to the DOJ and White House demanding full disclosure of communications and documents related to the pardon. They raised concerns about the overlap between CZ’s continued ownership of Binance, the firm’s previous violations, and the political motivations behind the clemency request.

By October 2025, insider reports suggested that the White House was “seriously considering” a pardon. On October 23, it became official. The White House framed the move as a necessary correction to what it labeled “Biden-era overreach” and an unjustified attack on crypto innovation.

Broader Implications On Crypto Market

The Democrats’ probe into Trump’s CZ pardon is more than a political scuffle it may become a key litmus test for how the U.S. navigates crypto regulation, presidential accountability, and the future of financial crime enforcement.

As the digital asset sector continues to grow in scale and political influence, the incident spotlights the need for clear boundaries between financial innovation and political power.

With regulatory reform pending and public scrutiny mounting, the coming weeks may determine whether the U.S. strengthens its stance against white-collar abuse or opens the door to further impunity for the elite.