The tension between US Senator Elizabeth Warren and Binance founder Changpeng “CZ” Zhao is heating up again. After Zhao’s lawyers accused Warren of defamation over her comments about his criminal case, her legal team firmly pushed back, saying her statements were based on verified facts and public records.
Warren Stands Her Ground
The dispute began when Warren posted on X on October 23, criticizing President Donald Trump for pardoning Zhao. In her post, she claimed Zhao “pleaded guilty to a criminal money laundering charge and was sentenced to prison,” calling the pardon an act of “corruption.”
Zhao’s lawyer, Teresa Goody Guillén, quickly fired back, demanding a retraction and threatening legal action for what she called “false and defamatory” remarks. However, Warren’s attorney, Ben Stafford, dismissed the threat, calling it baseless. He argued that Zhao indeed “pled guilty to violating an anti–money laundering law,” which is part of the Bank Secrecy Act, and that Warren’s description was factually correct.
Crypto Reaction
Crypto user, Max Schatzow criticized Changpeng Zhao (CZ) and parts of the crypto community for arguing that CZ’s conviction wasn’t related to money laundering. He explained that failing to maintain an anti-money laundering program is itself a criminal money laundering offense, making CZ’s defense “a dumb technical argument.”
While another user, Austin Campbell said that although he strongly disagrees with Senator Warren’s political views, she is legally in the right in this case. He explained that under First Amendment (1A) law, Warren has every right to make her statements about CZ’s guilty plea, and her comments are protected free speech.
The Real Issue: How Warren Worded It
Zhao pleaded guilty in November 2023 to failing to maintain an effective Anti-Money Laundering (AML) program at Binance, not to directly laundering money. He was sentenced to four months in prison in April 2024. The confusion stems from Warren’s choice of words, which some interpreted as implying Zthat hao had been charged with money laundering itself.
Warren’s team stood by her statement, saying it accurately reflected Zhao’s criminal conviction under an anti–money laundering statute. They added that her comments were “true in all respects” and based on credible reporting from outlets like The Wall Street Journal and Bloomberg.
Political Fallout and Binance’s Next Steps
This controversy comes amid renewed scrutiny of Binance and its ties to Trump’s crypto ventures. Reports suggest Binance is now exploring ways to re-enter the US market following Zhao’s pardon, including a possible merger with its US arm or allowing direct access for American users.
The pardon, granted after Zhao’s 2023 guilty plea, effectively lifted restrictions on his business activities and reignited debate over Trump’s close ties to the crypto industry.
For now, Warren’s team has made it clear they won’t retract anything, arguing her remarks are grounded in truth and protected under free speech. The clash adds yet another chapter to the growing tension between Washington lawmakers and the crypto elite.
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FAQs
CZ pleaded guilty to failing to maintain an effective Anti-Money Laundering program at Binance, a charge under the Bank Secrecy Act, not to directly laundering money himself.
Yes, reports confirm President Donald Trump pardoned CZ after his 2023 guilty plea, which lifted restrictions on his business activities.
The conflict centers on whether Warren’s description of CZ’s crime as a “criminal money laundering charge” was accurate or misleading, as his conviction was for AML failures.
Following the pardon, Binance is reportedly exploring options to re-enter the US market, including a potential merger with its US affiliate, Binance.US.
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