Trump's tariffs allowed shorting to earn 200 million! Traders hit again with "Binance CZ granted amnesty" raising insider trading suspicions.

Binance founder CZ confirmed that he has received a pardon from President Trump, driving the BNB price up by 5.38%. Crypto trader Garrett Jin heavily shorted Bitcoin and Ethereum before the Trump tariff news, with estimated profits between 160 million and 200 million dollars. Now, he is betting again on Trump's pardon of CZ, making a profit of about 56,000 dollars, accurately predicting and raising suspicions of insider trading.

Binance CZ receives Trump pardon, BNB pumps 5.38%

(Source: X)

Binance founder CZ published an article on X on October 23 confirming that he has received a pardon from President Trump. He said: “I am very grateful for today’s pardon and thank President Trump for his commitment to fairness, innovation, and justice in America. We will do our utmost to help the United States become the capital of cryptocurrency and promote the development of Web3 globally.”

Cardano founder Charles Hoskinson congratulated Binance's CZ on achieving this milestone and stated that the U.S. President corrected the severe injustices caused by the previous administration's war on encryption. Hoskinson wrote: “The Department of Justice should not weaponize this against our industry and its entrepreneurs. This has been, and continues to be, a deep wound that will take a long time to heal.”

According to data from CryptoSlate, as of the time of writing, the news pushed the BNB price up by 5.38%, reaching $1,132. Currently, the price of this digital asset has decreased by 17% from its historical high of $1,370. The news of Binance's CZ being pardoned not only positively impacts the BNB price but, more importantly, eliminates the biggest regulatory uncertainty facing Binance.

At the same time, this news was released after nearly a year of quiet lobbying by CZ's legal team. In May of this year, he admitted that his lawyers had requested a pardon from the U.S. government. Traditional media subsequently speculated that this move might involve private financial connections between Trump-associated entities and Binance, or collaborative agreements targeting other cryptocurrency executives. CZ publicly denied these claims, stating that they are politically motivated and “lack factual basis.”

Binance's CZ resigned from his position at Binance in November 2023 after acknowledging a money laundering charge in the United States. He served four months in prison and will complete his sentence in September 2024. Since his release, he stated that he would not return to the exchange but would focus on blockchain research, artificial intelligence investments, and new ventures for his nonprofit educational organization, Giggle Academy.

The pardon of CZ has significant symbolic meaning for the encryption industry. As the founder of the world's largest cryptocurrency exchange, CZ's legal issues have always been a Damocles' sword hanging over Binance. The issuance of the pardon not only clears CZ's personal record but also sends a clear signal from the Trump administration that it is friendly towards the encryption industry. This could lead to more institutional funds flowing into the encryption market, especially through Binance-related products and services.

Trump Tariff Pre-God-Level Shorting 700 Million Dollar Position Earns 200 Million

(Source: Arkham)

According to reports, on the prediction market Polymarket, cryptocurrency trader Garrett Jin is betting that Trump will pardon Binance's CZ this year. According to the blockchain analytics platform Arkham Intelligence, as the news spreads, this single bet has turned a not insignificant wager into a profit of about $56,000. However, this is only the tip of the iceberg of Jin's recent profits.

Jin has long been known in the cryptocurrency circle for his precise grasp of major market trends. Earlier this month, just before Trump announced a 100% tariff on goods imported from China, he heavily shorted Bitcoin and Ethereum on the Hyperliquid platform. These leveraged trades worth over $700 million caused prices to plummet within hours after the announcement, generating an estimated profit between $160 million and $200 million.

A leverage trading scale of 700 million USD in the encryption market is considered super whale level. If using 10x leverage, Jin's actual principal could be 70 million USD; if using 20x leverage, the principal would be 35 million USD. In either case, this is an extremely bold and risky operation. Shorting such a large position before Trump's tariff announcement could lead to a total loss of principal or even debt if the judgment is wrong.

The announcement time of Trump's tariffs was on October 10, when Bitcoin plummeted from $126,000 to $107,000, a drop of over 15%. Ethereum also experienced a sharp decline. Jin's shorting position gained massive profits during this crash. Based on a $700 million position, a 15% drop, and 10x leverage, the theoretical profit would be approximately $700 million × 15% × 10 = $1.05 billion. However, considering actual slippage, partial closing of positions, and market depth limitations, the actual profit is more reasonably between $160 million and $200 million.

Such timely bets have appeared repeatedly, the first time before President Trump's tariff announcement, and the second time before the reported pardon by Binance's CZ, which has again raised suspicions about insiders in the presidential position for a long time. The coincidence of two precise predictions has a very low probability, making the doubts about insider trading hard to ignore.

Garrett Jin's two divine predictions:

Trump Tariff Shorting: $700 million leveraged position, profit of $160-200 million, positioned hours in advance.

Binance CZ Pardons Betting: Polymarket bets and profits $56,000, predicting policy direction in advance.

Focus of Doubt: Precise operations before two major policy announcements, the probability of coincidence is extremely low.

However, Jin firmly denies any relationship with the Trump family. He stated on social media that his trading decisions are entirely based on the analysis of public information and judgments of market sentiment, denying any insider information. Jin claims that the possibility of Trump tariffs was already quite evident in the political atmosphere at the time, and the probability of CZ's pardon could also be inferred from the public lobbying activities of the legal team.

Insider Trading Concerns and the Gray Areas of the Encryption Market

(Source: Arkham)

Despite Jin's denial of insider trading, these two coincidences illustrate the growing reality in the cryptocurrency space that every policy move from Washington can have market consequences within seconds. One key difference between the crypto market and traditional financial markets is the intensity of regulation. In the stock market, insider trading is strictly regulated and heavily penalized, with Martha Stewart's imprisonment for insider trading being a famous case. But in the crypto market, such regulation is almost nonexistent.

Traditional media speculate that this move may involve private financial connections between Trump-related entities and Binance, or cooperation agreements targeting other cryptocurrency executives. The Trump family's cryptocurrency business has generated over $1 billion in profits over the past year, including partnerships with multiple crypto companies. If these collaborations involve information exchange or policy influence, they may constitute a conflict of interest.

Binance's CZ publicly denied these claims, stating that they are politically motivated and “have no factual basis.” However, the market is not entirely convinced by this denial. The quiet lobbying by CZ's legal team over the past year, along with the timing of the eventual pardons, has raised questions. If CZ or his representatives had any form of agreement or transaction with the Trump administration, and this information was obtained in advance by certain market participants, it would constitute a clear information asymmetry.

From a legal perspective, proving insider trading is extremely difficult. Direct evidence is needed to show the information transmission chain: from policymakers to traders. Merely relying on timing coincidences cannot constitute insider trading in the legal sense. Furthermore, the cryptocurrency market currently lacks a clear legal framework for insider trading, making it difficult for law enforcement agencies to prosecute even if insider trading does exist.

This regulatory vacuum provides market participants with a gray area for operations, but it also increases the risks for retail investors. When large players may have access to policy information that ordinary investors cannot obtain, the fairness of the market is seriously questioned. This is also why many analysts are calling for stronger regulation of the encryption market, establishing insider trading bans and information disclosure requirements similar to those in traditional financial markets.

For ordinary investors, this case provides an important warning: avoid using high leverage during policy-sensitive periods, as you may be betting against large players with information advantages. In addition, pay attention to policy trends and changes in market sentiment; although you may not be able to predict as accurately as Jin, at least you can avoid making wrong moves at the most dangerous moments.