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Binance’s Key Role in Trump-Linked USD1 Stablecoin Development Amid Controversies

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Binance and the USD1 Stablecoin

The world’s leading cryptocurrency exchange, Binance, has been integral in the establishment of the USD1 stablecoin backed by World Liberty Financial Inc., a company associated with the Trump family. According to insiders cited by Bloomberg, Binance was responsible for writing the smart contract that facilitated the coin’s creation, which played a pivotal role in a significant $2 billion investment transaction earlier this year.

Background and Controversies

This collaboration occurred despite Binance’s founder, Changpeng Zhao, having pleaded guilty earlier in 2023 to charges related to inadequate anti-money laundering measures, and subsequently requesting a presidential pardon.

Details of the USD1 Stablecoin

The USD1 stablecoin, which maintains a 1:1 value with the U.S. dollar while being supported by liquid assets such as cash, Treasury bills, and repurchase agreements, was central to a notable acquisition where investment firm MGX from the UAE used it to acquire a stake in Binance. A review of blockchain activity indicates that more than 90% of the USD1 tokens, valued at over $2 billion, are held within Binance’s wallets, generating substantial interest revenue that could potentially amount to tens of millions annually for the Trump family.

Marketing and Competitive Edge

Beyond merely developing the coding for USD1, Binance also actively marketed the stablecoin to its extensive user base of approximately 275 million. This promotional effort provides a significant competitive edge in the crowded stablecoin landscape. It remains unclear, however, whether Binance received any form of compensation for its involvement, as neither Binance nor World Liberty Financial has confirmed any such exchanges took place.

A representative from Binance refrained from commenting on specifics regarding the coding assistance or the associated investment, though they did confirm the typical listing procedures for USD1 went through Binance.

Legal and Financial Implications

Furthermore, the spokesperson remarked that Zhao is no longer serving as CEO and that his request for a pardon is a personal issue. This connection between Zhao and former President Trump—a figure who could potentially issue the pardon—has been met with scrutiny, raising concerns among legal experts regarding a president’s personal financial affiliations influencing official duties.

During Trump’s presidency, his family profited handsomely from crypto ventures, with Eric Trump stating that the family was drawn to these opportunities due to traditional banking constraints and a desire for more decentralized financial solutions.

Partnership Development

Commentary suggests the partnership between Binance and World Liberty took shape after Zhao’s meeting with Steve Witkoff, a Trump appointee and co-founder of World Liberty, soon after Trump secured his presidential victory. Although the participants have publicly denied the occurrence of this meeting, the collaboration deepened, culminating in Binance’s prominent involvement in launching USD1 and facilitating major deals.

Market Potential and Regulatory Concerns

Designed to create a stable digital dollar for enhanced and cheaper cross-border transactions, the USD1 stablecoin aims to capture a lucrative segment of the market. Despite the potential profitability associated with stablecoins—valued in the billions for their issuers—regulatory concerns loom large, and the risk of misuse is ever-present. Fortunately, USD1 does not appear to have associations with illegal activities and is backed by reserves managed by reputable firms VanEck and State Street.

Trump’s Financial Gains

Meanwhile, Donald Trump is continuing to benefit from the crypto boom, as recent financial disclosures indicate he earned $58 million from crypto-related activities in 2024, largely attributable to WLFI token sales. This amount is expected to increase further next year with an anticipated $390 million from a forthcoming token sale, alongside profits from a meme coin introduced in January.

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