After President Trump pardoned CZ this morning, World Liberty Financial’s WLFI token jumped over 14%. Although the former Binance CEO seems unrelated to this Trump family venture, the rally highlights key dynamics.
In essence, all these parties have become intertwined and formed a symbiotic relationship. On paper, Binance and the US President’s crypto empire can benefit from each other’s success.
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Binance and Trump Explained
This morning, the crypto space was rocked by President Trump’s decision to pardon CZ, the former CEO of Binance.
Since his former organization and the Trump family’s business interests are thoroughly entangled, this has raised community fears that other firms will try to bribe the President to receive favorable treatment.
However, calling this a case of outright bribery might be a little oversimplified. Trump and Binance both benefit symbiotically from continued commerce, and WLFI’s price spike today clearly illustrates that.
Although World Liberty is theoretically uninvolved in the pardon, it spiked over 14% today:
Coffeezilla, a prominent crypto sleuth, pointed to a specific example highlighting this symbiotic relationship.
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MGX, a UAE-based sovereign wealth fund, invested $2 billion into Binance this March.
But, this deal took a brief detour through the Trump family’s DeFi venture, converting the money into USD1, which it then gave to Binance.
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A Puzzle That Seamlessly Fits Together
The deal between Abu Dhabi’s MGX fund and Binance is not unconventional, but it’s how the deal was completed. MGX could have given the fund to Binance in any currency. It could have been USDC or USDT, the two most prominent and well-established stablecoins.
But this detour provided extra benefits while tying the two entities together. For World Liberty Financial, its new stablecoin got $2 billion in fresh liquidity shortly after its launch.
It will also gain between $60 million and $80 million in annual yield, provided that Binance doesn’t try to redeem the funds.
Binance, meanwhile, has thus gained a direct financial interest in ensuring that the Trump family stablecoin maintains its peg. This could explain why the crypto community considers this pardon a bullish case for the WLFI token.
If we can assume that CZ’s pardon is the main benefit for Binance, his personal stature still makes this a sound investment. Once he returns to legal business ventures in the US, CZ could recover those $2 billion quickly.
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Moreover, an ongoing relationship with the Trumps will doubtlessly involve future beneficial opportunities.
Although MGX could’ve simply given the money to Binance directly, involving USD1 and the Trump family cemented valuable ties.
The fund, for its part, cited World Liberty’s “compliance history” in choosing the asset. But given that World Liberty Financial is only a year old, other stablecoin providers likely hold a much more effective regulatory history.
CZ conducted business with this fledgling crypto empire on several key occasions, but the MGX deal highlights all the relevant dynamics. All these factors still apply in October. In other words, who benefited from the pardon? Everyone.
If proven, this level of corruption could be beyond unprecedented in the entire history of the United States. Ignoring potential market instability, relationships like this fundamentally undermine the fabric of society and political life.
