Trump's pardon decision for cryptocurrency industry figures and its policy implications

Source: PortaldoBitcoin Original Title: All of Trump’s Pardons to Prominent Figures in the Cryptocurrency Sector — So Far Original Link: Trump used his pardon power to reform the U.S. federal cryptocurrency regulation approach in 2025, pardoning some of the most well-known defendants in the industry. These measures mark a shift in Washington’s policy and have sparked questions about how the U.S. will regulate digital assets during Trump’s second term.

“Politics manipulated this case,” Trump announced when he issued his first pardon on Truth Social, calling the government’s past actions “ridiculous.” This statement reflects a broader strategy of positioning cryptocurrencies within national political disputes and reversing enforcement actions aimed at defining the industry’s boundaries over the years.

Pardoning Ulbricht Reverses Historic Cybercrime Case

In January, Trump granted his first crypto-related pardon, pardoning Silk Road founder Ross Ulbricht. Ulbricht has served over ten years and was sentenced to two life sentences for managing an underground market, money laundering, and drug trafficking charges related to Bitcoin transactions.

This pardon fulfilled Trump’s promise to libertarian voters and Bitcoin supporters backing the “Free Ross” movement. Months later, Ulbricht spoke at the Bitcoin 2025 conference, telling attendees: “Just a few months ago, I was behind those prison walls… now I am free, and it’s all thanks to you,” adding that Trump “followed through.”

Supporters see this decision as overdue relief for figures associated with early cryptocurrency development. Critics, including former prosecutors, argue it undermines a historic cybercrime indictment. U.S. Representative Thomas Massie publicly praised the pardon.

Founder of a Major Exchange Pardoned for AML Violations

In March, Trump pardoned the co-founders of a major exchange—Arthur Hayes, Benjamin Delo, Samuel Reed—and early employee Greg Dwyer. They all pleaded guilty in 2022 for failing to implement mandatory anti-money laundering controls, violating the Bank Secrecy Act.

At the time, the exchange tried to downplay the matter, describing it as “old news” after their guilty pleas. Each defendant received probation and financial penalties, but the pardon erased their felony records. Hayes later thanked Trump on X.

This decision marked a significant departure from the previous administration’s push to impose strict compliance standards on crypto exchanges serving U.S. customers.

Pardoning Zhao Sparks Political Corruption Allegations

While Trump’s pardons of Ulbricht and the exchange founders drew criticism from opponents, the most intense reaction came from his October pardon of a major exchange founder, Changpeng “CZ” Zhao. In November 2023, Zhao, founder of the world’s largest cryptocurrency exchange, pleaded guilty to violating AML rules. CZ served four months in prison in 2024.

The White House framed this pardon as ending the “Biden administration’s war on cryptocurrency.” Senator Chris Murphy accused the exchange of attempting to influence the government’s crypto agenda, citing a stablecoin related to Trump and a $2 billion Abu Dhabi deal involving tokens. These allegations are unverified but have prompted renewed scrutiny of the connections between the government and Trump family business, World Liberty Financial.

In an interview with 60 Minutes, Trump denied any personal ties to Zhao. “I don’t know who he is,” he said, describing Zhao as a “respected guy” who should have been “a victim of Biden’s witch hunt.” When asked about his children’s business dealings, Trump claimed, “They run a business, not in government.”

Zhao expressed “deep gratitude” on X after the pardon but did not return to any leadership position.

Political Reactions and Policy Changes

Supporters say the president kept his promise, easing federal pressure on the industry. Critics warn that these decisions blur the line between public policy and political loyalty.

“First, Changpeng Zhao pleaded guilty to criminal charges of money laundering. Then, he promoted a Donald Trump crypto enterprise and lobbied for a pardon,” Senator Elizabeth Warren stated in a release. “Today, Donald Trump did his part and pardoned him. If Congress does not block this corruption in pending market structure legislation, it will legitimize this illegality.”

Overall, these pardons mark a shift in the U.S. federal stance on cryptocurrencies in 2025 and lay the groundwork for new conflicts as 2026 approaches, with discussions on how actively the government will regulate the industry.