Binance founder Changpeng “CZ” Zhao is threatening to sue U.S. Senator Elizabeth Warren for defamation after Warren accused him of money laundering in a viral post on X (formerly Twitter). Zhao’s legal team, led by attorney Teresa Goody Guillen, has issued a formal demand for Warren to retract her statements, warning that a lawsuit will follow if she does not comply.
The controversy erupted shortly after President Donald Trump granted Zhao a presidential pardon, erasing the remaining penalties from his 2023 plea deal with the U.S. Department of Justice. Zhao had served four months in prison and paid a $50 million fine after pleading guilty not to money laundering, but to failing to maintain adequate anti–money laundering (AML) controls at Binance — a violation of the Bank Secrecy Act, not an allegation of personally laundering funds.
However in her post, Senator Warren claimed Zhao “pleaded guilty to a criminal money laundering charge and was sentenced to prison.” Warren also further accused CZ of helping finance Trump’s stablecoin in exchange for the pardon, saying that these deal are creating a very dangerous precedent.
“If Congress does not stop this kind of corruption, it owns it.”
The statement quickly drew widespread backlash. Legal experts and fact-checkers corrected that Zhao’s case involved compliance failures, not laundering, and that no criminal money-laundering conviction exists in his case file. Even X itself added a community note clarifying that Zhao’s charges related only to AML negligence.
Guillen, Zhao’s attorney, blasted Warren’s comments in a letter obtained by reporters:
“Mr. Zhao will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements that impugn his reputation.”
She added that Zhao “reserves his right to pursue all legal remedies” if Warren fails to correct the record both on X and through official channels.
While members of Congress are protected under the Constitution’s Speech or Debate Clause for statements made during official legislative duties, that immunity does not extend to public comments made on social media. Legal experts say this might leave her vulnerable to a defamation claim.
"The speech or debate clause protects debate and legislative acts-not false and misleading information."
The feud has reignited tensions in Washington over Trump’s crypto-friendly pardons. Warren, joined by fellow Democrats Adam Schiff, Bernie Sanders, and Chris Van Hollen, has introduced a resolution condemning the pardon and calling for a congressional probe into “political corruption” tied to Trump’s crypto ties.
Before introducing the resolution, Warren told Fox Business that Zhao “plead guilty to violating the law,” saying she was “calling him out for what he’s pled guilty to.”
Zhao, who remains Binance’s largest shareholder with an estimated net worth of $80 billion, has denied any financial connection to Trump’s World Liberty Financial or its USD1 stablecoin. Reports suggesting Binance code was used in the project have been dismissed by Zhao as misinformation spread by competitors.
As part of his 2023 settlement with the DOJ, Binance paid a record $4.3 billion fine — one of the largest in U.S. history — for failing to implement proper AML safeguards. The settlement required Zhao to step down as CEO, though he continues to wield significant influence within the company.
This is not Zhao’s first defamation dispute. In 2022, he sued Bloomberg’s Hong Kong publisher, Modern Media, after a Chinese-language article called Binance a “Ponzi scheme.” The case was settled in 2024 with a formal retraction, apology, and charitable donation.
The new clash with Warren could set an unprecedented legal precedent — testing how far free speech and political privilege extend when misinformation is published by public officials.
At its core, this case is about more than one senator’s tweet — it’s about truth and accountability in the digital age. Warren’s accusation, while politically charged, blurs an important legal distinction that the justice system itself upheld. If a sitting senator can mischaracterize a conviction without consequence, it risks eroding public trust not just in crypto, but in due process.
For Zhao, pursuing legal action could help repair his public image after years of scrutiny — but it also signals a growing assertiveness from the crypto industry against what it perceives as politically motivated attacks.
In an era where narratives often move faster than facts, this battle between CZ and Senator Warren could reshape how reputational disputes play out in both Washington and Web3.
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