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In the vibrant world of cryptocurrency, drama isn’t just limited to market fluctuations. Recently, Binance, the largest cryptocurrency exchange globally, found itself embroiled in controversy over allegations of political corruption. This follows claims that it helped to boost USD1, a stablecoin associated with the Trump family, shortly before President Donald Trump pardoned Binance’s founder and former CEO, Changpeng Zhao. The situation has become a political firestorm, especially with Sen. Elizabeth Warren (D-MA) aiming pointed accusations toward potential malfeasance.
Last week, Binance’s CEO, Richard Teng, defended the exchange against these allegations. In an interview with CNBC, he asserted that Binance did not promote USD1, the stablecoin connected to the Trump family’s venture, World Liberty Financial, prior to the presidential pardon of Zhao. However, the timeline of events has prompted skepticism from both Washington insiders and Wall Street analysts.
At the center of this controversial narrative is a colossal $2 billion investment deal Binance received from MGX Fund Management Ltd., a state-owned firm from Abu Dhabi. What made this transaction particularly noteworthy wasn’t merely its scale; rather, it was the fact that MGX settled the investment using USD1, the stablecoin created by World Liberty Financial.
Forbes, alongside Senators Warren and Jeff Merkley (D-OR), has highlighted that MGX’s investment and Binance’s subsequent listing of USD1 enhanced the stablecoin’s credibility during a pivotal period. Teng also noted that the decision to use USD1 for this transaction rested with MGX, emphasizing that Binance had no part in that decision-making process. He further asserted that USD1 had previously been listed on other exchanges prior to Binance’s involvement.
Conversely, sources cited by The Wall Street Journal report that Binance was not only complicit in facilitating the settlement using USD1 but apparently also aided in developing the technology underlying the stablecoin. This aspect adds a layer of complexity to the narrative surrounding the exchange’s involvement.
Another element fueling scrutiny is the timing of MGX’s USD1 acquisition, occurring just two weeks before the administration signed a significant agreement with the UAE focused on enhancing access to U.S. microchips. This timing has only added fuel to the scrutiny surrounding the investment deal.
Zhao, who stepped down from his CEO role in 2023 after admitting to charges of facilitating money laundering, remains a significant shareholder despite his legal troubles. The pardon he received from Trump was issued with the President stating he acted “at the request of a lot of very good people,” indicating a blend of political influence and personal connections in the crypto space.
Senator Warren wasted no time in connecting the dots, arguing that Zhao’s guilty plea to money laundering was followed by his promotion of a Trump-associated crypto venture, which subsequently led to a pardon from the President. It paints a picture that suggests a potential quid pro quo, raising serious questions about integrity and transparency.
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Adding to the complexities, World Liberty Financial’s financial structure reveals that Trump-affiliated firm DT Marks DEFI LLC, along with members of the Trump family, shares significant revenue from the platform and retains digital tokens that support the business model. Estimates indicate that this venture has been lucrative for the Trump family, potentially yielding hundreds of millions to billions in profits, as reported by Reuters.
World Liberty Financial’s website clarifies that Trump, his family, or members of DT Marks DEFI LLC serve neither as officers, directors, nor operators of World Liberty Financial and its affiliates. Both Donald Trump Jr., a co-founder, and CEO Zach Witkoff have dismissed concerns about potential conflicts of interest, maintaining a narrative that seeks to separate personal and professional ties.
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This article Binance Denied It Helped Trump’s Crypto Venture—But A $2B Deal And A Presidential Pardon Have Lawmakers Asking Questions was originally published on Benzinga.com
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