Why Gavin Newsom Labels CZ, Ross Ulbricht, and Arthur Hayes as Trump’s 'Criminal Cronies'

California Governor Gavin Newsom publicly identified Binance CEO Changpeng Zhao (CZ), Ross Ulbricht, founder of the Silk Road darknet marketplace, and Arthur Hayes, former BitMEX CEO, as part of former President Donald Trump’s “criminal cronies.” This characterization draws attention to ongoing debates about cryptocurrency regulation, presidential pardons, and political narratives shaping public policy on emerging financial technologies.

What happened

Gavin Newsom’s public statement categorizing CZ, Ulbricht, and Hayes as “criminal cronies” linked these figures rhetorically to Donald Trump’s administration. This grouping was reported by Decrypt and highlights an intersection of political critique and regulatory concerns surrounding cryptocurrency figures and activities.

Ross Ulbricht was convicted and sentenced to life in prison for his role in operating Silk Road, a darknet marketplace facilitating narcotics trafficking and money laundering, as confirmed by the U.S. Department of Justice. Arthur Hayes pleaded guilty to violating the Bank Secrecy Act by failing to implement adequate anti-money laundering controls at BitMEX, resulting in criminal fines and probation. Both men have documented criminal convictions related to illicit activities connected to cryptocurrency platforms.

By contrast, Changpeng Zhao, the CEO of Binance, has not been charged with any crimes. However, Binance and its affiliates have been under regulatory investigation by multiple U.S. agencies, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), focusing on compliance and potential market manipulation issues. These probes have not resulted in formal charges against CZ as of the available reporting.

While Donald Trump’s administration granted pardons or clemency to some individuals linked to cryptocurrency or related legal issues, official records show no pardons or clemency granted to CZ, Ulbricht, or Hayes. This absence indicates that Newsom’s “criminal cronies” label is not based on formal acts of presidential clemency but appears to be a political framing.

Analysis from Decrypt and commentary cited by CNBC suggest that Newsom’s rhetoric aims to underscore perceived regulatory shortcomings and political leniency in the crypto sector under or associated with Trump’s influence. The inclusion of CZ, despite the lack of criminal charges, appears to be a strategic move to associate prominent crypto industry leaders with a broader narrative of lawlessness or regulatory evasion.

Why this matters

Newsom’s framing of these figures as part of Trump’s “criminal cronies” highlights the contested political and regulatory environment surrounding cryptocurrency. The juxtaposition of convicted individuals like Ulbricht and Hayes with an uncharged but scrutinized figure like CZ reflects broader anxieties about the integrity and oversight of the crypto industry.

This narrative serves to emphasize the perceived need for stronger regulatory frameworks and accountability mechanisms in cryptocurrency markets. It also underscores the political dimensions of crypto regulation, where associations with prominent political figures can influence public trust and legislative momentum.

Moreover, the invocation of presidential pardons, despite no direct evidence of clemency for these individuals, raises questions about the role of political intervention in shaping legal outcomes and regulatory enforcement in emerging financial sectors. Newsom’s comments can be seen as part of a wider push to frame crypto regulation as not only a matter of market integrity but also political responsibility.

What remains unclear

The available reporting does not clarify any direct evidence of a relationship or collaboration between Changpeng Zhao and Donald Trump beyond regulatory investigations and political association. There is no public documentation or filings confirming a formal link or intervention by the Trump administration benefiting CZ, Ulbricht, or Hayes.

It is also unclear whether Trump’s administration took any specific actions to aid these individuals or their businesses beyond the broader context of pardons granted to other crypto-related figures. The association appears primarily rhetorical rather than evidentiary.

Additionally, the implications of presidential pardons on the development of cryptocurrency regulation at the state or federal level remain insufficiently explored in the sources. There is no comprehensive analysis available on how these pardons intersect with policy proposals or enforcement priorities.

Finally, the impact of Newsom’s framing on public opinion and legislative momentum around crypto regulation has not been quantified or studied in the available material. No polling data or public sentiment research is provided to assess how such political narratives influence market participants or lawmakers.

What to watch next

• Regulatory developments and enforcement actions by U.S. agencies such as the CFTC and SEC regarding Binance and its affiliates, which may clarify the regulatory status of CZ and Binance’s operations.
• Any further public statements or policy proposals from Gavin Newsom’s administration related to cryptocurrency oversight, particularly in California, which could signal shifts in state-level regulatory approaches.
• Potential disclosures or legal proceedings involving Arthur Hayes or Ross Ulbricht, though the latter is serving a life sentence, any appeals or related cases could affect the discourse.
• Congressional or federal regulatory initiatives addressing presidential pardons’ implications on financial crimes and cryptocurrency enforcement.
• Public opinion data or research examining the influence of political narratives on perceptions of cryptocurrency legitimacy and regulatory support.

Gavin Newsom’s characterization of CZ, Ross Ulbricht, and Arthur Hayes as “criminal cronies” linked to Donald Trump encapsulates ongoing tensions between political rhetoric, legal accountability, and regulatory oversight in the crypto sector. While Ulbricht and Hayes’ criminal convictions are indisputable, CZ’s inclusion reflects a broader political strategy rather than established legal findings. The absence of documented pardons or direct connections to Trump underscores the primarily rhetorical nature of the association. As regulatory scrutiny intensifies and political narratives evolve, the interplay between law, policy, and public trust will remain central to the future of cryptocurrency governance.

Source: https://decrypt.co/352729/gavin-newsom-singles-out-cz-ross-ulbricht-arthur-hayes-trump-criminal-cronies. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.