Hi everyone,
It's a big day tomorrow in NYC, NJ and VA, and if you're in any of those places, don't forget to head out to the polls and make your voices heard!
President Trump sat down with 60 Minutes last night and one thing that was interesting to me was the conversation about Trump's pardon of crypto entrepreneur Changpeng Zhao. Zhao is the Canadian founder of Binance, which was the rival to FTX, which was helmed by Sam Bankman-Fried. While SBF was charged, 5 of those charges were later, quietly dropped by Biden's DOJ.
In response to Norah O'Donnell's questions about Zhao, Trump said "Okay, are you ready? I don't know who he is. I know he got a four-month sentence or something like that. And I heard it was a Biden witch hunt." Seems like Trump should probably know who he's pardoning, but since he doesn't, I thought it made sense to get into it.
"The government at the time said that CZ had caused significant harm to US national security, essentially by allowing terrorist groups like Hamas to move millions of dollars around. Why did you pardon him?" O'Donnell asked.
Per a congressional report in 2024, "Qassam Brigades used Binance, a cryptocurrency exchange, to facilitate cryptocurrency transactions since as early as 2019." The Qassam Brigades stopped accepting Bitcoin in 2023 over concerns of donors being targeted.
The Binance reveal in 2023 led to government consideration of further sanctions and also to the prosecution of Binance head Zhao. Palestinian Islamic Jihad also sought and received crypto donations to fuel their terrorism, as did the Izz al-Din al-Qassam Brigades. But no other crypto exchange was mentioned in the report as having allowed trades to sanctioned regions. The Wall Street Journal, on whose reporting the Biden admin based their prosecution, later had to issue a correction.
A little Binance background: As Binance CEO, Zhao was the one who in 2022 called attention to Dem mega-donor FTX CEO Sam Bankman-Fried's crypto house of cards, leading to scandal for Dems and conviction for SBF.
In 2022, crypto exchange FTX was in trouble because they had inflated the cost of their FTT coin by having sister company Alameda (run by SBF's polycule girlfriend) hold massive quantities of it, inflating both the value of the coin and of Alameda.
On a Sunday in Nov 2022, Zhao said publicly that he would sell off his FTT holdings bc he was worried about the value of it. This led FTT-holders to panic. FTX had a cash crunch as FTT lost 80% of it's value between Mon and Tues, wiping out $2 billion. It dropped by another half on Weds.
Zhao said Binance might bail them out, took a look at the due diligence, and backed off instantly. Zhao also called for further decentralization of crypto, while SBF was calling for more regulation of the industry.
FTX customers essentially staged a run on FTX and tried to get their money out, revealing that FTX did not actually have their money. FTX collapsed. FTX and Alameda staged a massive shell-game in which Democrats, and a few GOP politicians, benefited from their donations.
Zhao revealed FTX was a fraud by questioning the value of their FTT coin, which was intentionally and artificially overvalued. Then the Biden DOJ went after Binance and Zhao in 2023 after a report from the Wall Street Journal said Hamas had been using the Binance exchange.
Libby