Binance Holds 87% of Trump's USD1 Stablecoin After Pardon

Binance, the world's largest cryptocurrency exchange by trading volume, holds approximately 87% of the USD1 stablecoin's circulating supply, totaling about $4.7 billion out of $5.4 billion, a concentration that exceeds other major stablecoins on a single exchange [1, 2]. This high concentration has sparked discussions about potential liquidity and redemption risks, particularly following President Donald Trump's pardon of Binance founder Changpeng Zhao (CZ) in October 2025 [1].

Binance's Deepening USD1 Integration

USD1 is a stablecoin issued by World Liberty Financial (WLFI), a crypto project launched in September 2024 and connected to Donald Trump and his family, with Trump listed as co-founder emeritus [1, 2]. An LLC affiliated with Trump owns about 38% of WLFI, which reportedly added around $1 billion to his net worth, and Trump reported $57.4 million in earnings from it for the year ending December 2024 [1, 2]. The stablecoin's reserves are invested in US Treasurys, with interest benefiting the issuers [1, 2].

Binance's significant holding of USD1 developed through several strategic moves starting in 2025 [1]. In May 2025, the US Securities and Exchange Commission (SEC) ended its lawsuit against Binance shortly after the exchange listed USD1 [1, 2]. That same month, Abu Dhabi fund MGX used $2 billion in USD1 to invest in Binance, effectively placing reserves with USD1's custodian [1, 2]. By December 2025, Binance began shifting assets from its old stablecoin, BUSD, into USD1 [1]. In late January 2026, Binance ran a promotion offering $40 million in WLFI tokens to USD1 holders, receiving tokens directly from WLFI for the promotion [1, 2]. These steps have embedded USD1 deeply within Binance's system, primarily for non-US users, as Binance is barred from serving American customers under a 2023 settlement [1, 2].

Risks and Regulatory Gaps

The high concentration of USD1 on Binance has raised concerns among experts. Crypto researcher Molly White noted that this gives Binance leverage over World Liberty Financial, with potential risks such as asset locks during legal proceedings [1, 2]. Former SEC adviser Corey Frayer highlighted concerns about transparency and the separation of exchange and customer funds, suggesting such setups could impact USD1's redemption and price stability during market stress [1]. World Liberty Financial spokesperson David Wachsman countered that Binance's role is akin to a retailer's shelf space, denying any undue influence [1, 2]. Binance stated its involvement with USD1 is standard for its listings and comes with typical risk controls [1, 2].

The US passed the GENIUS Act in 2025, establishing the first federal framework for stablecoins, requiring them to be backed by dollar-equivalent assets [1]. However, the law does not mandate diversification of these assets across different platforms, an omission that Brookings analysis suggests could increase risks for stablecoins like USD1, where most of the supply is concentrated on one exchange [1].

What to watch

• Regulatory scrutiny: Monitor any further regulatory guidance or enforcement actions regarding stablecoin concentration on single exchanges, particularly in light of the GENIUS Act's current limitations.
• Binance's USD1 promotions: Observe future promotions or shifts in Binance's stablecoin strategy, as these have significantly influenced USD1's market presence and concentration.
• On-chain distribution: Track changes in USD1's distribution across other exchanges and wallets to see if the concentration on Binance begins to decrease or if other platforms gain significant holdings.

The unusual concentration of USD1 on Binance, coupled with the timeline of the founder's pardon and the stablecoin's rapid integration into the exchange's ecosystem, highlights ongoing questions about market influence and the structural risks within the stablecoin sector.