Crypto Reckoning: Analyzing CZ’s Pardon and Its Implications for Regulation

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While President Trump has pardoned Chang Penzao, the convicted founder of the crypto exchange Binance.

The move could clear the way for the world's largest crypto exchange to return to the US after being barred from operating here since 2023.

Now CZ pleaded guilty in late 2023 after Binance admitted to violating US anti-money laundering laws and as part of a. $3 billion settlement with the Justice Department.

CZ stepped down as CEO and served 4 months in prison.

Well joining me here at the New York Stock Exchange on this Friday morning to weigh in is Austin Campbell, adjunct professor at NYU Stern School of Business.

Austin, great to have you back.

Thank you so much for joining me.

Yeah, it's a busy news day, so.

So first and foremost, what did you make of the CZ headline yesterday?

So I think this reckoning has been a long time coming in the crypto space because there are really two narratives that have come out over time, and the winner is now CZ was treated unfairly because if you look at the US financial markets and call it our history post Dodd Frank, multiple.

Banks have been accused of roughly the same behavior CZ engaged in and were simply fined, and their executives were not sent to jail.

So many people have thought for a long time it's unfair that CZ went to jail.

Clearly President Trump is part of that camp, or he would not have been given a pardon.

And then there are the lingering questions about business dealings, both of Binance and with the Trump family behind that.

But the core thrust is fairness.

Yeah.

And speaking of which, 2025 has been quite the year when it comes to crypto as well as digital assets.

And of course all eyes have been on regulation when it comes to the crypto landscape.

So what did you make of that liquidation event we saw October 10th to the 11th?

I mean, if anything, it's proof that crypto continues to speed run the history of traditional finance, right, like.

Throughout time in traditional markets we've had large volatility.

We've had major bankruptcies, for instance, Lehman Brothers, and we've had to unwind derivatives positions.

Crypto by virtue of being a 24/7, always on trading system, is experiencing this volatility maybe more than traditional markets, and here.

It is the core idea is very strong, but the lack of the infrastructure around it and the unrepentant use of leverage by crypto traders really amps up the risk, so.

The story and the takeaway from this is there's nothing wrong with the core products, but a lot of the belt and suspenders, right, things like circuit breakers, leverage limits like FCMs, position assignments just don't exist in crypto.

So when something like this happens, you only have one mechanism for sorting things out, that's the price.

Yeah, and you bring up an important point because Our producer and I, we were talking yesterday.

Was it October 10th or October 11th that the liquidation event happened because in New York it was during traditional equity trading hours while if you're in Asia or say Australia, it was already the 11th.

So that really does speak to the 24/7 nature of crypto.

But what would you say were the key takeaways or lessons learned from that day?

So one is exactly as you said, the 24/7 nature is going to pose some interesting challenges because the ability of a scaled trading firm to handle 24/7 trading versus an individual human who has to do things like, I don't know, eat and sleep is going to be very different.

So one, there's an inherent question of fairness.

The other is if you want to build a system without a lot of these belt and suspenders type protections, who should be allowed to use that and what amounts?

This does have a big impact on institutional adoption because the reality is if you can't come up with ways to prevent 60+% downturns, a lot of these assets should not.

For instance, on bank balance sheets.

Yeah, and speaking of which, as we reflect here at the New York Stock Exchange on what has come to market in terms of products in 2025, I think stablecoins are something that all retail investors are paying attention to, especially given the IPO circle that happened earlier this summer.

So where are we when it comes to stablecoins and what needs to happen?

So I tell everybody we're still very early on these stablecoins right now.

There's roughly $300 billion of them in the world, which sounds big until you realize there are roughly $7 trillion of government money market funds or tens of trillions of dollars of bank deposits.

It's still a rounding error.

We're early, so.

In internet terms, we're basically in the early 90s.

What do we need for them to be adopted?

Better UI, better UX, the ability of the average person like my mom to use them without having to think about it.

Yeah, and as we count down to your end, of course all eyes are on the regulatory landscape, but of course we have to keep in mind that the government is in shutdown mode and we have no idea without a crystal ball when the government will reopen.

So when it comes to legislation, what can we? not only heading to your end but also in 2026 and the implications for the crypto and digital asset.

Well, to bring it all the way back around, I think the CZ pardon has greatly complicated legislation going forward because the Democrats are going to use the narrative that This is Donald Trump taking money from CZ and then handing him a pardon, and that is corrupt behavior, and they're going to want to have a say in that if they're going to pass any crypto legislation through the Senate.

So whether you believe that argument or not, I do foresee it coming as a political point.

And then, to be honest, maybe a larger argument about the BSA in general because we shouldn't have a world where it's legal for banks to launder money and they just get fined.

But if you do it in crypto, you go to jail.

I think we're going to see a reckoning on some of these first principles questions to be able to move forward with legislation.

Yeah, and finally, before I let you go, we have about 30 seconds here.

So what are some innovations that you're actually excited about?

One, I still remain very excited about stablecoins and cross border payments.

Like if anybody sent an international wire, it's terrible, and sometimes they vanish for days.

These are much better technology.

2, 24/7 automated trading and auto liquidation does work in some ways.

Crypto, despite the big crash, did not stop working.

And so there are some lessons to be learned in there.

I'm hopeful we get the best of between crypto and the traditional system.

Well, Austin, great having you live here at the New York Stock Exchange, as always, and thank you so much for breaking down some of the very dense and complicated headlines out there.

Thank you for having me back.

Thank you.