Crypto mogul Changpeng Zhao links with UAE ruling families after US prison release

Billionaires gravitate to the UAE for billionaire reasons. The country doesn’t levy an income tax, and it’s considered extremely safe, at a time when crypto investors have been targeted by kidnappers in Europe and the US. But for Zhao, the UAE held another important advantage: It had no extradition treaty with the US.

In either late 2022 or early 2023, he recalled, an Emirati royal asked him over dinner whether he wanted citizenship. Zhao sent in some documents and waited. Months later, a government emissary arrived at his house, holding a box with passports for Zhao and his family.

He had reason to be wary: The noose around Binance was tightening. US prosecutors were collecting evidence that the exchange’s lax protocols had allowed scammers, hackers and sanctions evaders to move money. In private messages obtained by the government, Binance employees spoke with astonishing candour about the exchange’s shady clientele.

Zhao hired a team of lawyers to broker a deal with the US Justice Department. His new passport gave him considerable leverage. After a couple of years in Dubai, he moved an hour-and-a-half south to Abu Dhabi, closer to the nation’s centre of political power.

Eventually, his legal team struck a bargain with the US government. Zhao would plead guilty to violating the Bank Secrecy Act, an anti-money-laundering statute, and step down as CEO. (The company would pay a $US4.3 billion penalty.) Despite the generous terms, he was frustrated with his lawyers and didn’t think he deserved any prison time at all.

Still, it was an excellent outcome for Binance. At the sentencing hearing in the spring of 2024, Zhao delivered a contrite statement: “I deeply regret my failure, and I’m sorry.” The judge gave Zhao a four-month sentence, calling him “a dedicated family man and a giving person”.

As the rare felon with virtually unlimited resources, Zhao was ideally positioned to suffer as little as possible. He was assigned to Lompoc II, a low-security facility in California. Before he reported to prison, Zhao assembled a team of advisers, who schooled him in the subtleties of cellblock politics. One of them, Michael Santos, exchanged letters with other inmates, who agreed to help Zhao get his bearings inside. “CZ, you’re a guy who’s understood people and had thousands of employees,” Santos told him. “You’re not going to lose those skills when you walk in here.”

In August 2024, Zhao left Lompoc for a halfway house. But a complication with his immigration status meant he had to spend his last two weeks at a local jail. On the day of his release, an officer escorted him outside, where his mother, sister and assistant were waiting. They drove to a nearby airport and deposited him on a private plane bound for Abu Dhabi.

Zhao returned to a world that was shifting in his favour. A crypto-friendly administration was poised to take power in Washington, DC. Shortly before the election, Trump had founded World Liberty as a joint enterprise with the family of Steve Witkoff, a real estate mogul who was preparing to serve as White House envoy to the Middle East. Soon, America’s newly empowered dealmaker-diplomats were spending lots of time in the UAE.

As he drove me around the city, Zhao paused to point out the ADNEC Centre, a conference hall that hosted a gathering of crypto enthusiasts in December 2024.

“This is where I met Eric Trump,” he said. At the venue, he recalled, a Trump booster named David Bailey had introduced him to the president’s middle son, a leader of World Liberty. It was a casual conversation, with no official agenda.

Their interests were about to align. The UAE had been working to transform from a petrostate into a powerhouse in emerging technologies, a project spearheaded by Sheikh Tahnoon, who oversees $US1.5 trillion in Emirati sovereign wealth. Before he went to prison, Zhao had held talks with Peng Xiao, one of the sheikh’s top lieutenants, about selling the Emiratis a stake in Binance, the ultimate union between his company and his political guardians.

Sheikh Tahnoon is chair of a venture capital fund called MGX, which specialises in AI. Early last year, MGX agreed to invest $US2 billion in Binance, a deal that valued the company at $US75 billion, according to a person familiar with the matter. MGX viewed Binance as the perfect bridge between crypto and AI.

Zhao told me that he wanted to settle the deal in bitcoin. The Emiratis worried that it was prone to drastic price swings that would complicate the transaction. They preferred to pay Zhao in stablecoins, a type of cryptocurrency designed to maintain a price of $1.

What happened next is widely disputed — and likely to become the subject of a congressional investigation if the Democrats win control of the US Congress in November. According to MGX, the fund evaluated several stablecoins before selecting USD1, a coin created by World Liberty, citing “business suitability”.

It was a stunning choice, given that USD1 was completely untested, with no track record. Last year, The Wall Street Journal reported that Binance had specifically asked MGX to pay in USD1; Zhao said MGX had made the decision.

But all the parties had an incentive to cut World Liberty into the transaction. A UAE-backed investment firm had taken a 49 per cent stake in the start-up in January 2025, days before Trump’s inauguration; Sheikh Tahnoon got a seat on World Liberty’s board. Around the same time, the Emiratis were negotiating with the White House to secure the export of the valuable computer chips that power AI. Binance also had business in front of the Trump administration. With its legal troubles receding, the company wanted to escape some of the restrictions imposed in the 2023 settlement.

Democrats in Congress condemned the deal as “stablecoin corruption”. An issuer like World Liberty makes money by accepting cash deposits from crypto traders, giving them stablecoins in return and then investing the deposits to generate a yield. With the $2 billion from MGX and Binance, World Liberty instantly became one of the world’s largest stablecoin companies, a boon to the Trump and Witkoff families. “It’s just such a craven effort to curry favour,” said Democratic Senator Richard Blumenthal, who has investigated Zhao and Binance. “Unprecedented in its scope and scale of corruption.”

Zhao is adamant that nothing untoward occurred. He said he no longer held the USD1, which he used to invest in bitcoin and other assets. “I assume that President Trump has very good lawyers, and the set-up where the sons run businesses and the father is the president is completely kosher,” he told me.

Two weeks after the $US2 billion transaction, the White House agreed to share access to the chips, overcoming concerns from some US national security officials.

Privately, Witkoff also told an acquaintance that Zhao deserved a pardon, according to a person familiar with the conversation. Zhao had filed the relevant paperwork and was waiting for the president’s verdict. The outcome would have enormous implications for Binance. After Zhao pleaded guilty, the exchange’s dormant US operation lost state-level licences. A pardon could help the company pitch itself to regulators. (A White House spokesperson said Witkoff did not play a role in the pardon process.)

As early as December 2024, Zhao’s legal team had been working with Brett Tolman, a prominent lawyer, to explore the possibility of clemency, according to two people familiar with the matter and documents reviewed by The New York Times.

Ultimately, Binance paid $US2.1 million to a lobbying firm run by Ches McDowell, who is close to the president’s elder sons, for services including “executive relief”, according to public filings. A World Liberty spokesperson said the company had “zero involvement in any decisions on pardons”.

Since prison, Zhao has split his time among a range of ventures, including his tech investments and his travels as a kind of crypto diplomat, helping promote the industry in countries where he’s often treated like royalty.

Zhao downplays his involvement in Binance; the company’s plea deal prohibited him from “operating or managing” the business. But it’s obvious that Binance remains a major part of his life. One of the two co-CEOs appointed to replace him was He — the mother of his three young children.

Two years ago, in a gesture towards traditional governance, Binance established a board of directors with three supposedly independent trustees. One of them is also the board’s chair — Gabe Abed, the friend who first recruited Zhao to the UAE.

Lately, Binance has faced new accusations of impropriety. The company fired or suspended four compliance officials last year, after they reported that nearly $2 billion had flowed from customer accounts to a cluster of entities with ties to Iran — a possible repeat of the sanctions evasion that led to the US criminal case in 2023. The company disputed the employees’ findings and denied that anyone had been disciplined for raising concerns. The Justice Department said later that two Chinese firms had used Binance to launder the proceeds of Iranian oil sales, though it didn’t file any charges against the exchange.

Zhao has the confidence of someone who has glided away from trouble over and over, a consummate winner in an era that often rewards brazen rule-breaking. In his memoir, he writes for a page and a half about his belief in “simulation theory”, the notion that we might all be living in someone else’s imagined reality.

That belief has given Zhao some detachment from the stresses of everyday life. It’s possible we’re versions of Super Mario, he writes, running around an artificial landscape. He tries to live by a simple mantra: “It’s just a game.”

This article originally appeared in The New York Times.