CZ Vs Senator Warren: Binance Founder Threatens Lawsuit Over Money Laundering Claim: Report | Invesloan.com

Binance founder Changpeng “CZ” Zhao is threatening to sue U.S. Senator Elizabeth Warren for defamation, escalating a political and legal clash sparked by his recent presidential pardon.

The move comes after the Massachusetts Democrat accused him of money laundering in a post on X, a claim his legal team says is false and damaging.

The dispute began shortly after President Donald Trump pardoned Zhao last week, wiping away the remaining penalties from his 2023 plea deal with the U.S. Department of Justice.

The 48-year-old crypto billionaire had served a four-month prison sentence and paid a $50 million fine after pleading guilty to violating the Bank Secrecy Act, not for money laundering, but for failing to maintain an effective anti-money laundering (AML) program while running Binance.

Elizabeth Warren Under Fire for Claim That CZ Was Convicted of Money Laundering

In her post, Warren wrote, “CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison. But then he financed President Trump’s stablecoin and lobbied for a pardon. Today, he got it. If Congress does not stop this kind of corruption, it owns it.”

The statement quickly drew criticism from legal experts and fact-checkers.

X itself added a “readers added context” note clarifying that Zhao “did not plead guilty to money laundering.”

Instead, he admitted to compliance failures under the Bank Secrecy Act, a technical violation that carried no allegations of fraud or personal laundering of funds.

Zhao’s attorney, Teresa Goody Guillen, told The Post that her client is preparing a formal demand for Warren to retract her statements.

“Mr. Zhao will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements that impugn his reputation,” Guillen wrote in a draft letter reviewed by the outlet.

She added that if the senator does not issue a retraction, Zhao “reserves his right to pursue all legal remedies.”

CZ vs. Warren: Can a U.S. Senator Be Sued for a Tweet?

At the heart of the dispute is Warren’s claim that Zhao was convicted of money laundering, a charge that does not exist in his case file. The Justice Department charged Zhao with failing to implement proper AML controls, allowing illicit transactions to pass through Binance.

The violations included transactions linked to sanctioned countries and criminal organizations. As part of the settlement, Binance paid $4.3 billion in fines, one of the largest corporate penalties in U.S. history, while Zhao stepped down as CEO.

Warren’s office has not retracted or amended her statements. When asked about the threatened lawsuit, a spokesperson for the senator had no immediate comment.

In an interview with Fox Business before introducing a Senate resolution condemning Trump’s pardon, Warren said Zhao “plead guilty to violating the law” and claimed she was “calling him out for what he’s plead guilty to.”

The senator, alongside California Democrat Adam Schiff, has since pushed a resolution urging Congress to investigate what they describe as “political corruption” linked to Trump’s crypto ties.

Democrats, including Warren, Bernie Sanders, and Chris Van Hollen, have also sent letters to Attorney General Pamela Bondi questioning whether Trump’s business interests influenced the decision to pardon Zhao.

Tensions Rise Over Trump’s Crypto Pardons

Zhao, worth an estimated $61 billion and still Binance’s largest shareholder, has denied any involvement in financing Trump’s stablecoin project, USD1, issued by the Trump family’s firm World Liberty Financial.

Reports suggesting Binance code was used in the token’s creation have been dismissed by Zhao as “misinformation” and “a hit piece sponsored by competitors.”

The defamation threat marks a bold move by Zhao to defend his name and reputation.

Legal experts note that while members of Congress are protected by the Constitution’s Speech or Debate Clause for comments made during official legislative duties, that immunity does not extend to public statements made on social media.

Guillen emphasized this distinction on X, writing, “The Clause does not protect the transmittal of allegedly defamatory material in press releases and newsletters. Immunity ≠ Impunity.”

If Zhao proceeds with the lawsuit, it would not be his first defamation action.

In 2022, he sued Bloomberg’s Hong Kong publisher, Modern Media, for a Chinese-language article that labeled Binance a “Ponzi scheme.” The case was settled in 2024 after the publisher retracted the headline, issued an apology, and made a charitable donation.

The new threat against Senator Warren comes as debate intensifies over Trump’s use of presidential pardons to benefit figures connected to the cryptocurrency industry.

Warren and other Democrats have accused Trump of using executive clemency to protect allies tied to his own financial interests, while Trump’s team insists the pardon was a correction of overreach by the Biden administration’s Justice Department.

Zhao’s pardon has also revived tensions within Congress over crypto regulation. Representative Ro Khanna has introduced a bill that would ban elected officials from owning or launching cryptocurrencies, citing the Zhao pardon as an example of “blatant corruption.”

Meanwhile, Representative Maxine Waters condemned the decision as “legitimizing crypto crime,” arguing it undermines federal law enforcement efforts.

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