Recent exchanges highlight growing tensions between U.S. politicians and crypto industry figures. Sen. Elizabeth Warren’s legal team has pushed back against claims on social media that she slandered Binance founder Chao Changpeng in the wake of the presidential pardon controversy. The controversy highlights the heightened scrutiny and heated debate surrounding cryptocurrency regulation, legal liability, and reputational risk in the evolving blockchain space.
- Elizabeth Warren’s lawyer dismissed claims that social media posts defamed Binance’s Chao, insisting the posts were factually accurate.
- The controversy stems from Warren’s X post linking Zhao’s guilty plea to money laundering charges to his alleged role in securing Trump’s pardon.
- Mr. Zhao’s legal team has demanded that the senator’s remarks be retracted, saying they are groundless and unfairly damage his reputation.
- Both sides have cited publicly available information, namely the status of Mr. Zhao’s guilty plea and Mr. Trump’s pardon, as a key issue.
- The case highlights the ongoing debate over crypto-related political influence and the importance of accurate legal and public communications in the industry.
As the debate over crypto regulation and political influence continues, a lawyer for US Senator Elizabeth Warren disputes allegations that her social media posts defamed Binance founder Chao Changpeng. The controversy arose after Zhao’s lawyer, Teresa Goody Guillen, threatened to sue Warren for “defamatory statements” she made on X, which linked Zhao’s pardon to corruption and money laundering allegations.
The New York Post reported that Guillén asked Warren to delete an Oct. 23 post that referenced Zhao’s criminal case and Trump’s pardon, claiming the senator’s statements were false. Warren’s lawyer, Ben Stafford, responded in a legal letter obtained by Punchbowl News, arguing that Warren’s posts are factually accurate and protected as opinions, and stressing that Zhao has pleaded guilty to violating anti-money laundering laws, an allegation that Zhao strongly denies.
In his post, Warren said that Zhao “pleaded guilty to criminal charges of money laundering and was sentenced to prison,” but Zhao quickly rejected this, insisting that “there was no money laundering.” [charges]” Zhao’s guilty plea for failing to maintain an effective AML program was entered in November 2023, and he was sentenced to four months in prison in April this year.
Lawyer claims statement requires ‘actual malice’
Zhao’s lawyers argued that Warren’s comments lacked “actual malice” and therefore did not constitute defamation, citing legal standards for public figures. Warren’s post also claimed that Chao “funded President Trump’s stablecoin and lobbied for a pardon,” linking him to controversial financial transactions involving Binance and the related stablecoin USD1 used in multi-million dollar transactions.
Financial news outlets such as the Wall Street Journal and Bloomberg have reported that Binance played a role in creating the USD1 stablecoin pegged to the US dollar, which was used for investments including a $2 billion deal with a United Arab Emirates government-backed entity. These revelations further complicate the broader issue of how cryptocurrencies interact with global finance and politics.
According to Politico, Zhao’s presidential pardon comes after months of intensive lobbying by Binance and its legal team to gain support in Washington, a move that has drawn scrutiny over potential conflicts of interest in the crypto industry’s political connections.
In his legal response, Stafford argued that Warren’s statements were based on publicly reported facts and that disclosure of the truth should not damage Zhao’s reputation. He stressed that Zhao’s guilty plea only related to the violation of AML laws, not the money laundering charge itself.
Mr. Zhao’s lawyer asks for retraction.
Mr. Chao’s lawyer, Mr. Guillen, criticized Mr. Warren’s post as a misuse of his office to spread harmful falsehoods. The lawyer told Warren that her claims misrepresent the facts surrounding Zhao’s case and that she could face legal action if she did not retract her statements.
Gillen’s letter said Warren’s references to Chao’s guilty plea and the political implications of Trump’s pardon were inaccurate and should be corrected. The controversy highlights the delicate nature of the political narrative surrounding crypto entrepreneurs, especially when it involves high-profile litigation or national interests.
This incident exemplifies the ongoing debate about how misinformation and celebrity statements can impact perceptions of the digital asset sector, and highlights the importance of verified and transparent communication in a rapidly evolving cryptocurrency environment.