After Trump’s Zhao Pardon, Representative Ro Khanna Moves to Ban Crypto in Congress

Representative Ro Khanna (D-Calif.) announced plans to introduce legislation that would ban elected officials from owning or creating cryptocurrencies. The move follows President Donald Trump’s controversial pardon of Binance founder Changpeng Zhao. Khanna made the remarks on Monday on MSNBC’s Morning Joe, which he later shared on his official YouTube channel.

Khanna Links Bill to Ethics and Financial Transparency

During the interview, Khanna described the pardon as ‘blatant corruption,’ asserting that it exposed the inherent contradictions between political power and digital money. According to him, Zhao’s maneuvers included money laundering, foreign connections, and illegal movements of money. He called for legislators to be outright barred from owning any cryptocurrency or receiving funds associated with foreign interests. 

Notwithstanding, Khanna's comments were nonetheless wrong. As part of the Justice Department’s $4.3 billion settlement in 2024, Zhao acknowledged his involvement in money laundering and other related activities. Contrary to Khanna's claim, he was sentenced to four months, not four years, in prison. Zhao was innocent; nevertheless, he took a plea bargain, and there is no reliable evidence that he was involved in Trump's stablecoin project.

Khanna, despite all the errors, still maintained that his proposal aimed to tackle corruption, not regulate technology. "It is just a matter of technology; we won't be able to stop the next corruption scandal. This," he said, "is why we need to be careful with who we appoint to Washington." Khanna also indicated that the proposal was similar to another one he made in 2023, the Ban Congressional Stock Trading Act, which sought to ban trading in individual stocks by legislators and top public officials.

Extending the Ban to Digital Assets

Khanna said his upcoming bill would apply the same ethical framework to cryptocurrency. Lawmakers would have to divest from digital assets or place them in blind trusts. The measure aims to eliminate financial conflicts that could influence policymaking in the rapidly evolving digital-asset sector.

He argued that “money going into someone at the “White House” followed by “official actions like pardons” represents a serious ethical breach. His comments suggested that expanding the existing stock-trading ban to include cryptocurrencies would reinforce integrity across government financial dealings.

While his earlier bill stalled in committee, it helped ignite bipartisan discussions about strengthening congressional ethics rules. Khanna said this new legislation intends to carry that momentum into the crypto era.

Broader Fallout from Trump’s Pardon of Zhao

Khanna's announcement is at the heart of the debates surrounding the pardon that Trump granted to Zhao. This decision has drawn criticism from Democrats and ethics regulators, who question the openness of the entire process.

The Californian politician linked the pardon directly to financial system reform, claiming it could shed light on the frailties of a system in which money can influence critical political decisions. On the other hand, critics argue that cryptocurrencies are a double-edged sword, as they could lead to insider trading and foreign interference.

If the law passes, cryptocurrencies would be the first asset class added to the list of assets members of Congress are forbidden to trade. It only highlights the growing concerns in Washington about the political and moral implications for lawmakers who may be involved in or deal with digital currencies.

While Khanna plans to present the bill this week, the discussion regarding the use of digital currencies in governance raises a landmark question: Should the policymakers who determine financial regulations be allowed to hold and trade the very assets they regulate?

Conclusion:

The introduction of Representative Ro Khanna's proposal to ban lawmakers from dealing in cryptocurrencies aims to reinforce congressional ethics by preventing financial conflicts of interest. The bid follows Trump's pardon of Changpeng Zhao, the founder of Binance, and reflects cross-party concern about digital currencies' influence on U.S. policymaking.

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