- Changpeng Zhao, founder and former CEO of Binance, was pardoned by former President Donald Trump after serving prison time related to anti-money laundering (AML) failures.
- Massachusetts Senator Elizabeth Warren called Zhao a “money launderer” and criticized the pardon as corrupt, leading to legal threats from Zhao’s lawyer.
- Warren inaccurately claimed Zhao pleaded guilty to a criminal money laundering charge; his guilty plea involved failing to maintain an effective AML program.
- The Wall Street Journal reports Binance facilitated a $2 billion purchase of a stablecoin connected to Trump’s crypto business, adding complexity to the pardon issue.
- The dispute has attracted support for Zhao from crypto figures and even convicted financial criminals, while no legal action has yet been taken.
Changpeng Zhao, the founder and former CEO of Binance, has been publicly challenged by Massachusetts Senator Elizabeth Warren after former President Donald Trump pardoned him. The controversy began last week when Warren accused Zhao of being a “money launderer” and suggested that Congress shares responsibility if corruption is allowed to continue.
A lawyer representing Zhao told the New York Post that the senator must retract her “false statements,” both in her Senate resolution and on social media platform X (formerly Twitter), warning that Zhao “reserves his right to pursue all legal remedies available” for defamation (source).
Trump’s pardon followed Zhao’s prison sentence, which resulted from his guilty plea to federal charges concerning Binance’s failure to maintain an effective anti-money laundering (AML) program, an essential system for preventing financial crimes such as money laundering (official details). Senator Warren has criticized the pardon as an example of a “quid pro quo,” arguing Zhao received clemency because of his financial support for Trump’s crypto initiatives. On the Senate floor, she said, “Pardoning convicted crypto billionaires sends a message: If you have money and the right connections, you don’t have to follow the law.”
However, Warren’s claim on X that Zhao “pleaded guilty to a criminal money laundering charge” is inaccurate, as his guilty plea was for failing to implement proper AML controls, not for money laundering itself. Zhao’s legal team insists that this distinction merits a retraction.
The Wall Street Journal has added context to the situation by reporting that Binance was involved in facilitating a $2 billion purchase of a stablecoin issued by World Liberty, which was tied to Trump’s crypto enterprises. This involvement has raised some surprise within the Trump administration regarding Zhao’s pardon (read more).
The conflict has drawn backing for Zhao not only from cryptocurrency professionals and business leaders but also from some convicted financial criminals, who argue that Zhao should take legal action against Warren. Despite the tension, no lawsuit has been filed, and Warren has not retracted her social media post.
Proving defamation requires showing that a false statement was made with negligence or malice and caused reputational harm, a difficult legal standard to meet. The dispute’s current state suggests that a court case may be avoided, as litigation could be costly, prolonged, and require Zhao to disclose sensitive information publicly.
It is likely that the disagreement will remain unresolved legally, with Warren possibly amending her characterization of Zhao’s conviction to reflect the failure to maintain AML procedures instead of labeling him a money launderer.
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