The big deal

Recently: The Kremlin and Syria’s Islamist rulers were at war for years. Why are they working together now? Vali Nasr on the swift and unexpected transformation of power in the Middle East.

Today: How did Changpeng Zhao go from U.S. federal prison to a presidential pardon in under a year? The commercial deals around the clemency do exactly what American reformers spent a century trying to eliminate.

+ For members: How are U.S. administration officials thinking about their risk exposure?

& New music from Lu.Re ...

A pardon worth two billion

Changpeng Zhao, the founder of the cryptocurrency exchange Binance, received a presidential pardon on Thursday for money-laundering violations. He’d admitted in 2023 that he failed to install compliance systems at Binance—a deliberate business decision, prosecutors showed, not an oversight. Internal messages revealed employees knew they were breaking the law. The result: Hamas, Al Qaeda, the Islamic State, and people in sanctioned countries moved money freely on his platform. The U.S. treasury secretary at the time, Janet Yellen, said Binance had “allowed illicit actors to transact freely, supporting activities from child sexual abuse to illegal narcotics to terrorism.” Zhao served four months in prison and paid a $50 million fine. He kept his majority stake and virtually all of his estimated $85 billion fortune.

The White House argues that the Biden administration had “overly prosecuted” Zhao—that prosecutors sought three years when the judge called the request unprecedented. The sentencing dispute was real; prosecutors did seek an unusually harsh three years. But that concerned punishment, not guilt. Zhao admitted the conduct. The compliance failures weren’t accidental; they were how Binance became the world’s largest crypto exchange, processing at times two-thirds of all digital-currency transactions.

What makes the pardon so striking is the commercial architecture around it. Binance has entered into a deal with World Liberty Financial—the Trump family’s crypto venture—positioning the exchange to receive a $2 billion investment using World Liberty’s stablecoin. The arrangement generates tens of millions annually for World Liberty’s controlling partners, the families of President Donald Trump and Steve Witkoff. Zhao hired lawyers with Trump administration ties: Ches McDowell, a longtime hunting companion of Donald Trump Jr. spotted at the White House last week, and Teresa Goody Guillén, who represents Zach Witkoff, son of Trump’s Middle East envoy. The sequence—family business deal, connected advocacy, presidential clemency—follows a pattern civil-service and ethics-laws reformers spent a century trying to eliminate.

The closest historical parallel in the American context would be the 2001 pardon of the fugitive commodities trader Marc Rich by President Bill Clinton, after Rich’s ex-wife donated $450,000 to Clinton’s library fund. It sparked a federal investigation and became shorthand for corrupt clemency. In this case, Senator Elizabeth Warren describes Zhao’s pardon bluntly in the same terms, as corruption. The White House calls it ending “the Biden administration’s war on cryptocurrency.” The $2 billion deal, the connected lobbyists, and now the pardon are matters of public record.

Meanwhile

• Oil as leverage. The Trump administration sanctioned Russia’s two largest oil companies—Rosneft and Lukoil—on Wednesday, hours after canceling a planned Putin summit. The companies account for half of Russia’s crude exports. Oil jumped 5 percent. China and India, the primary buyers, now face pressure to find alternatives or risk secondary sanctions.
• Kharkiv under fire. Russian forces hit a private kindergarten in Kharkiv, Ukraine, on Wednesday morning using Iranian-made Shahed drones. Forty-eight children sheltered in the basement; all evacuated safely. The attack killed one adult and injured about 10. President Volodymyr Zelensky called it Russia’s “spit in the face to everyone who insists on a peaceful solution.” Broader strikes across Ukraine meanwhile killed at least six.
• Mediterranean deaths. At least 40 migrants from sub-Saharan Africa drowned on Wednesday when their boat capsized off Tunisia near Mahdia. About 70 aboard; 30 rescued. Tunisia signed a €255 million EU deal in 2023—half for migration enforcement—but crossings continue. The International Organization for Migration has recorded over 32,800 deaths in the central Mediterranean since 2014.
• Pentagon press replacement. The U.S. Defense Department announced a “next generation” press corps on Wednesday featuring 60 journalists from far-right outlets after reporters from almost all established news organizations refused new credential rules. The new roster includes Gateway Pundit (which settled a defamation suit over false election claims) and podcast host Tim Pool (who allegedly took significant sums of money from a Russian influence operation). The Washington Post, New York Times, Fox News, Newsmax, and other major outlets all declined the terms. … See “The calculation,” below.
• Poker and prop bets. American federal authorities arrested 30+ people on Thursday—including the National Basketball Association’s Terry Rozier, a guard for the Miami Heat, and Chauncey Billups, the head coach of the Portland Trail Blazers—in gambling schemes connected with the mafia. One involved using X-ray tables and marked cards to steal $7 million. The other involved betting on inside information: Rozier allegedly told associates he’d fake an injury, allowing bettors to win on “under” prop bets—wagers that his statistics would fall below projected lines. The Federal Bureau of Investigation’s Director Kash Patel called it a “criminal enterprise that envelops both the NBA and La Cosa Nostra.”

From the latest despatch

The calculation

At the Pentagon on Tuesday, the press facilities cleared out. Reporters from virtually every major American news organization left the building. By Wednesday, for the first time since it opened in Arlington, Virginia, in 1943, no major media outlet—with the exception of One America News—had reporters covering the Department of Defense, an agency that spends nearly a trillion U.S.-taxpayer dollars annually, on site. All the departing organizations had refused to sign Defense Secretary Pete Hegseth’s new media policy demanding reporters sign an acknowledgment that harm “inevitably flows” from disclosure of unauthorized information, classified or not.

The same week, The Wall Street Journal reported that Gary Shapley, now working inside the criminal-investigation division of the U.S. Internal Revenue Service, maintains a target list on behalf of President Donald Trump—a list that reportedly includes the liberal billionaire George Soros. Senior IRS lawyers have privately warned that proposed cases appear vindictive and politically motivated. Since the 1970s, after President Richard Nixon weaponized the IRS against his own enemies, U.S. federal law has made it a crime for White House officials to request investigations of specific taxpayers. The administration is dismantling those safeguards from inside—installing loyalists, reducing lawyer oversight, eliminating procedural barriers.

It seems clear enough what they’re doing: They’re arrogating power to the president of the United States, with little regard for existing norms or, possibly, laws. The institutional justifications don’t really hold up as more than pretexts. The tougher question appears to be: What do Trump’s norm-thrashing loyalists think will happen when they’re no longer in power?

How are they thinking about risk?

New music

‘Draw a Line’

Lu.Re is a young producer helping revitalize U.K. garage and 2-step—syncopated, shuffling dance styles from the late 1990s and early 2000s—but folding them into contemporary bass music. In this new track, she takes a great vocal hook and fuses it with big-room energy—expansive, festival-ready production that hits hard in large spaces—a lush hi-hat sound, and bumping beats.