Binance’s chief executive has publicly disavowed the crypto exchange’s involvement in the selection of a stablecoin backed by former U.S. President Donald Trump’s family, as legislators investigate potential financial ties.
Richard Teng, CEO of Binance, denied any role in the decision to use USD1, a stablecoin from World Liberty Financial, in a $2 billion transaction with Abu Dhabi-based firm MGX. World Liberty Financial is a company backed by the Trump family.
“Binance did not participate in the decision,” Teng stated, according to a CNBC report published Tuesday. He added, “The use of USD1 in the transaction with MGX as a strategic investor was decided by MGX. We did not participate in that decision.”
The arrangement drew scrutiny after Eric Trump, a co-founder of World Liberty Financial and son of the former president, disclosed that payments for the MGX deal would be made in USD1. This allows the Trump family to benefit directly from the transaction.
Critics quickly raised concerns about potential conflicts of interest and a “pay-for-favors” scheme related to the stablecoin.
The controversy intensified following President Trump’s pardon of Changpeng “CZ” Zhao, Binance’s former CEO, on October 23. Zhao had pleaded guilty to charges related to deficiencies in Binance’s Anti-Money Laundering programs.
The pardon, issued despite a $4.3 billion settlement with U.S. authorities, fueled speculation of political exchanges between Trump and the cryptocurrency company.
During a “60 Minutes” interview, Trump denied knowing Zhao personally. He suggested the Department of Justice under the Biden administration had acted unfairly. These statements reignited theories of a possible exchange of political favors.
Separately, a Bloomberg report in July, citing anonymous sources, alleged Binance had contributed to the development of USD1’s underlying code. Zhao subsequently hinted at a defamation lawsuit against Bloomberg, calling the information “false and biased.”
Binance has not issued additional comments on the Bloomberg allegation. World Liberty Financial, meanwhile, maintains that its own technical team developed the token entirely.
Several U.S. legislators have called for explanations from the government and the Trump family regarding their relationship with Binance.
Senator Chris Murphy, a Democrat from Connecticut, stated in October that Binance.US, the exchange’s U.S. affiliate, was “promoting Trump’s crypto” shortly after Zhao’s pardon. Binance.US publicly denied the claim in a statement.
Senator Elizabeth Warren, a Democrat from Massachusetts, also reiterated her concerns about financial links between Zhao and President Trump. This prompted another threat of legal action from Binance.
The ongoing situation continues to spark debate in Washington regarding the independence of the judicial system and the risks of political influence in cryptocurrency regulation.