Cryptocurrency mogul Changpeng “CZ” Zhao plans to file a lawsuit against U.S. Senator Elizabeth Warren, who accused him of corruption following his recent presidential pardon. Warren's comments, posted on social media after former President Donald Trump's decision, sparked a political and legal storm surrounding one of the crypto sector's most iconic figures.
In brief
- CZ Zhao plans legal action after Sen. Warren accused him of money laundering and corruption in a viral post.
- Warren's remarks came after Trump's pardon, reigniting the debate over crypto's influence in American politics.
- Zhao's lawyers point out that he was never indicted for money laundering, but only for breaches of the Bank Secrecy Act.
- Some legal experts say Warren's publications may not be covered by parliamentary immunity, putting her at risk of defamation.
A dispute over the facts
Zhao, founder and former CEO of Binance, was convicted in 2023 of violating the Bank Secrecy Act for failing to implement sufficient controls against money laundering. He served four months in prison, paid a $50 million fine and left office as part of a settlement with the Justice Department.
Contrary to Warren's claims, Zhao has never been charged or convicted of money laundering, a point his legal team says is crucial to protecting his reputation.
Shortly after Trump's pardon, Warren accused CZ on X (formerly Twitter) of pleading guilty to money laundering, while accusing him of funding Trump's stablecoin project and lobbying for his pardon. She warned that Congress would be “complicit in corruption” if it remained inactive.
Zhao's lawyer, Teresa Goody Guillen, responded in a statement that her client plans to file a defamation suit if Warren does not retract her comments. In an official letter, she emphasizes that these statements “seriously damage her reputation” and asks the senator to publish a correction on X as well as in the Congressional records.
According to Guillen, CZ intends to “respond firmly” to these accusations which he considers false. Legal proceedings could be launched quickly if no withdrawal occurs.
Warren Relaunches Her Crusade Against Trump's Crypto Ties
An influential member of the Senate Banking Committee, Warren has long criticized the proximity between Donald Trump and the crypto industry, which she considers dangerous for financial regulation. Along with Senator Adam Schiff, she filed a resolution condemning CZ's pardon and urging Congress to “end this form of corruption.”
Before introducing the resolution, Warren reiterated that Zhao broke the law and must be held accountable.
CZ supporters denounce distortion of facts
The Zhao affair continues to fuel the debate on the links between politics, finance and regulation of cryptocurrency. Trump's pardon has sparked both praise and outrage: his supporters see it as a correction to an excess of prosecutions under the Biden administration, while his detractors see it as a conflict of interest, linked to Trump's growing involvement in digital assets.
CZ backers say Warren's statements not only misrepresent the nature of her conviction, but falsely insinuate corrupt dealings with Trump. They recall several essential elements of the defense of the founder of Binance :
- No money laundering charges: Zhao's guilty plea related only to recordkeeping and compliance failures, not laundering criminal proceeds.
- No Financial Ties: No transfers or direct investments have been verified between Zhao and Trump's family businesses, despite the participation of some mutual investors in World Liberty Financial, a crypto initiative associated with the former president.
- Public clarification: A community note published on X corrected Warren's post, clarifying that CZ had pleaded guilty only to a violation of the Bank Secrecy Act.
- Limited immunity: Warren's comments on social media would not be protected by the constitutional “speech or debate” clause, which covers legislative acts but not public statements.
- Potential damages: Legal experts believe that if the statements were found to be defamatory, the repercussions could be significant, both financially and reputationally.
Attorney Teresa Goody Guillen reiterated online that free speech protections for members of Congress do not apply to false statements made outside of official proceedings. “The speech or debate clause protects legislative acts, not false and misleading statements”she wrote on X, adding that Warren's public remarks could expose her to legal action.
Trump's crypto stance back in the spotlight
Zhao's pardon also reignited scrutiny of Trump's pro-crypto policies. Since returning to power, the latter has relaxed several regulatory restrictions on digital assets and promoted a more favorable framework for the industry. But for his critics, these decisions coincide too closely with his family's growing financial interests in cryptocurrency, notably through the launch of the World Liberty Financial stablecoin.
Those close to the former CEO of Binance, for their part, insist on the fortuitous nature of any interaction between Zhao's activities and those of Trump. According to them, Binance and World Liberty Financial operate completely independently, and the fact that some investors use World Liberty's stablecoin to acquire shares in Binance does not prove any coordination between the two entities.
Despite his resignation, CZ remains one of the most influential figures in the crypto sector, with a fortune estimated at around $80 billion. It retains a major stake in Binance and remains a key reference in the world of digital assets.
According to several sources familiar with the matter, Trump's pardon was intended to “correct a political prosecution.” The former president reportedly considered the sentence imposed on Zhao disproportionate and motivated by partisan considerations.
But the decision angered Democrats, who see it as a new example of favoritism towards Trump's wealthy allies. The resolution introduced by Warren aims to force Congress to more strictly examine presidential pardon powers, particularly when they appear to serve financial or political interests.
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