Senator Warren Dismisses Defamation Threat from Binance Founder CZ as Baseless

U.S. Senator Elizabeth Warren has firmly rejected a defamation threat from Binance founder Changpeng Zhao (CZ), asserting that any legal claims would be "without merit." The exchange follows Zhao's lawyer's demand that Warren retract a social media post concerning his recent pardon by President Donald Trump.

Key Takeaways

Senator Warren's legal team has responded to a defamation threat from Binance founder CZ.
The threat stems from a social media post by Warren regarding CZ's pardon by President Trump.
Warren's lawyer argues her statements were truthful and based on publicly available facts.

The Defamation Dispute

Lawyers for Changpeng Zhao, the founder of cryptocurrency exchange Binance, had threatened to sue U.S. Senator Elizabeth Warren for defamation. The demand, reported by the New York Post, called for Warren to remove an October 23rd post on X (formerly Twitter) that alleged "corruption" in President Trump's pardon of Zhao on the same day.

In her post, Warren stated that Zhao "pleaded guilty to a criminal money laundering charge and was sentenced to prison." Zhao, however, contested this, asserting online that "there were NO money laundering [charges]."

Warren's Legal Rebuttal

Ben Stafford, a lawyer representing Senator Warren, responded in a letter to Zhao's lawyer, Teresa Goody Guillén, obtained by Punchbowl News. Stafford declared that "any threatened defamation claim would be without merit." He emphasized that the law Zhao "pled guilty to violating is an anti-money laundering law."

Stafford further argued that Warren's X post was "true in all respects and therefore cannot be defamatory," as it "accurately represented publicly available and widely reported facts."

Background on Zhao's Plea and Pardon

In November 2023, Changpeng Zhao pleaded guilty to failing to maintain an effective Anti-Money Laundering (AML) program at Binance, a violation of the Bank Secrecy Act. He was subsequently sentenced to four months in prison by a Seattle federal court in April 2024.

Warren's post also alleged that Zhao "financed President Trump’s stablecoin and lobbied for a pardon." This added to existing criticisms of Trump's pardon, fueled by reports of ties between Binance and his family's crypto venture, World Liberty Financial. The Wall Street Journal and Bloomberg have reported that Binance was involved in creating World Liberty's stablecoin, USD1.

Legal Standard for Defamation

Stafford's letter highlighted the legal standard for defamation claims involving public figures. "A public figure such as Mr. Zhao cannot prevail on a defamation claim without presenting evidence that the defendant published a false statement of fact with actual malice," he stated.

Zhao's lawyer had requested Warren retract her statements from both her X post and a Senate resolution denouncing Trump's pardon. Failure to do so, the letter warned, could lead Zhao to "pursue all legal remedies available to address these false statements."

Stafford clarified that Warren's post "simply references the fact that Mr. Zhao pled guilty to a violation of U.S. anti-money laundering law" and should not be interpreted as alleging guilt for other money laundering charges.

Sources

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