Lawmakers Advocate for Crypto Trading Prohibition to Prevent Corruption Tied to Pardons

Representative Ro Khanna (D-Calif.) has put forward a resolution seeking to ban the president, their relatives, and members of Congress from engaging in cryptocurrency trading or accepting overseas funds, expressing worries about potential political corruption linked to the crypto sector

. This initiative comes in response to President Donald Trump’s contentious decision to pardon Changpeng Zhao, the convicted Binance founder, a move that has sparked strong backlash from Democrats and heightened concerns about possible conflicts of interest, according to BeinCrypto.

Khanna, a prominent supporter of crypto innovation, claimed that Trump’s pardon of Zhao—who admitted guilt in 2023 to facilitating money laundering—demonstrates a form of “corruption” that benefits the president and his family, as reported by

. “We have a president who is amassing extraordinary wealth for himself and his family, unlike anything seen before in American history,” Khanna said during an MSNBC interview, pointing to Zhao’s investment after his conviction in , a stablecoin project supported by Trump, according to Benzinga. The resolution is intended to break financial connections between lawmakers and the crypto industry, a step Khanna argues is vital to restore public confidence.

Zhao’s pardon, following his four-month prison term after a $4.3 billion settlement with U.S. authorities, has become a central issue in the discussion over cryptocurrency’s role in politics, as noted by

. The Biden administration’s Justice Department had pushed for a three-year sentence for Zhao, who was found guilty for Binance’s involvement in unlawful transactions tied to terrorist organizations, Politico reported. In contrast, Trump’s team defended the pardon as a stand against the “war on crypto,” with White House representatives arguing Zhao was unfairly singled out, according to Wired. Binance’s later lobbying, which included a $450,000 payment to a firm linked to Donald Jr., added to suspicions of reciprocal favors, NBC News reported.

Democrats have been among the most outspoken opponents. Senator Elizabeth Warren (D-Mass.) denounced the pardon as a clear case of “corruption,” warning that Trump’s crypto connections could foster “lawlessness.” Warren and Senator Adam Schiff (D-Calif.) introduced a Senate resolution to officially denounce the pardon, citing Binance’s financial involvement with World Liberty Financial and the 15% jump in WLFI token value after the pardon as signs of profiteering, according to

. Meanwhile, Representative Maxine Waters (D-Calif.) accused Trump of endorsing “crypto crime,” arguing that his pro-crypto stance puts personal benefit above the public good, as highlighted by Benzinga.

This legislative push comes as the U.S. continues to debate broader crypto regulations. Coinbase CEO Brian Armstrong voiced hope that bipartisan crypto bills like the CLARITY Act could be enacted by the end of the year, despite ongoing debates about DeFi regulation, as mentioned in

. However, critics such as Summer Mersinger from the Blockchain Association caution that hasty regulation may hinder innovation, a point raised in a Coinpedia article.

Globally, Australia’s rate of crypto adoption is projected to reach 31% in 2025, surpassing the U.S., with stablecoin transactions totaling $46 trillion, according to

. Nevertheless, security remains a concern, with Immunefi CEO Mitchell Amador stating that “hack rates” must fall below 1% for stablecoins to achieve widespread trust, as reported by CryptoNews.

Khanna’s measure faces significant challenges in a Senate controlled by Republicans, but it highlights the increasing examination of crypto’s sway over politics. As Trump’s involvement with the industry grows—his campaign has received millions in crypto contributions and his family’s stablecoin business has brought in $4.5 billion—the ongoing debate over ethics, regulation, and financial conflicts of interest continues to intensify.