CZ Zhao Weighs Lawsuit Against Warren Over False Money Laundering Claim

Crypto mogul Changpeng “CZ” Zhao is weighing legal action against U.S. Senator Elizabeth Warren after she accused him of corruption tied to his recent presidential pardon. Her social media remarks, posted after former President Donald Trump pardoned Zhao, have ignited a political and legal storm involving one of the most prominent figures in global cryptocurrency.

Fact Dispute Erupts After Warren’s Social Post Misstates Crypto Case Details

Zhao, the founder and former CEO of Binance, was convicted in 2023 of violating the Bank Secrecy Act for failing to maintain sufficient anti–money laundering controls. He served four months in prison, paid a $50 million fine, and resigned under a plea deal with the U.S. Department of Justice.

Contrary to Warren’s claim, Zhao was never charged or convicted of money laundering—a distinction his legal team says is essential to protecting his reputation.

Shortly after Trump issued the pardon last week, Warren accused CZ on X of pleading guilty to money laundering, alleging he helped fund Trump’s stablecoin project and lobbied for the pardon. She warned that Congress would be complicit in corruption if it failed to act.

Zhao’s attorney, Teresa Goody Guillen, said in a statement that her client plans to file a defamation lawsuit unless Warren retracts her remarks. In a recent draft letter, Goody Guillen wrote that Warren’s comments “impugn his reputation” and urged the senator to correct the record both on X and through official congressional channels.

As contained in the letter, CZ plans to respond forcefully to what he considers defamatory remarks from a sitting senator. Guillen said legal action may follow soon if Warren fails to issue a formal retraction.

Senator Warren Intensifies Criticism of Trump’s Crypto Links Following Zhao Pardon

Warren, a senior Democrat on the Senate Banking Committee, has long criticized Trump’s ties to the crypto industry and his administration’s deregulation efforts. Alongside Senator Adam Schiff, she introduced a resolution condemning Trump’s pardon of CZ and urging Congress to “use its authority to stop this form of corruption.”

Before introducing the resolution on Tuesday, Warren said Zhao had admitted to breaking the law and that she was holding him accountable.

CZ Supporters Reject Warren’s Claims, Stress No Money Laundering Charge

Zhao’s case continues to fuel debate over the intersection of politics, finance, and cryptocurrency regulation. Trump’s pardon drew both praise and outrage: supporters viewed it as correcting prosecutorial overreach under the Biden administration, while critics saw it as a conflict of interest tied to Trump’s growing involvement in digital assets.

CZ’s supporters argue that Warren’s statements not only mischaracterize his conviction but also falsely imply corrupt dealings with Trump. They point to several key facts central to the Binance founder’s defense:

• No money laundering charge: Zhao’s guilty plea involved record-keeping and compliance failures, not the laundering of criminal proceeds.
• No financial ties: There are no verified financial links between Zhao and Trump’s family ventures, despite investments in World Liberty Financial, a Trump-linked crypto initiative.
• Public clarification: A community note on X corrected Warren’s post, stating that CZ pleaded guilty only to a Bank Secrecy Act violation.
• Limited immunity: Warren’s social media comments may fall outside the protections of the Speech or Debate Clause, which shields legislative acts but not public remarks.
• Potential damages: Legal experts note that if the statements are found defamatory, the consequences could be financially and reputationally significant.

Goody Guillen reiterated online that free speech protections for members of Congress do not extend to false statements made outside official proceedings. “The Speech or Debate Clause protects debate and legislative acts—not false and misleading information,” she posted on X, adding that Warren’s public remarks could expose her to legal liability.

Trump’s Crypto Stance Faces Scrutiny After CZ Pardon

Zhao’s pardon has also placed Trump’s crypto policies under renewed scrutiny. Since returning to office, Trump has eased regulatory barriers around digital assets and promoted a more industry-friendly environment. Critics say these moves coincide with his family’s growing business interests in cryptocurrency, including the launch of World Liberty Financial’s stablecoin.

People close to the former Binance chief insist that any overlap between his ventures and Trump’s is purely incidental. They maintain that Binance and World Liberty Financial operate independently and that investors’ use of World Liberty’s stablecoin to acquire interests in Binance does not imply coordination between the two entities.

CZ remains one of the wealthiest figures in the crypto space, with an estimated net worth of around $80 billion. Despite his resignation, he continues to hold a major stake in Binance and remains a central figure in the digital asset world.

Trump’s pardon was described by insiders as an effort to “correct a political prosecution.” According to sources familiar with the decision, the former president viewed Zhao’s punishment as disproportionate and politically motivated.

Meanwhile, Warren’s pushback has resonated among Democrats, who see the pardon as part of a broader pattern of favoritism toward wealthy allies. Her resolution seeks to compel congressional review of presidential pardon powers when tied to financial or political benefits.