TLDR
- Changpeng Zhao’s lawyer threatened to sue Senator Elizabeth Warren for defamation over an X post claiming he pleaded guilty to a money laundering charge
- Warren’s lawyer Ben Stafford rejected the threat, stating the claim is “without merit” because Zhao pleaded guilty to violating the Bank Secrecy Act, an anti-money laundering law
- Zhao pleaded guilty in November 2023 to failing to maintain an effective Anti-Money Laundering program at Binance and served four months in prison
- President Trump pardoned Zhao in October 2025 after Binance helped create World Liberty Financial’s USD1 stablecoin
- Warren’s lawyer argues public figures like Zhao must prove “actual malice” to win defamation cases, which cannot be shown when statements are factually accurate
Senator Elizabeth Warren’s legal team has rejected a defamation lawsuit threat from Binance founder Changpeng Zhao. The dispute centers on Warren’s description of Zhao’s criminal guilty plea following his presidential pardon.
Zhao’s lawyer Teresa Goody Guillén sent a letter threatening legal action unless Warren removed her October 23 X post. The post stated Zhao “pleaded guilty to a criminal money laundering charge and was sentenced to prison.”
Zhao contested this characterization online, claiming “there were NO money laundering charges.” His lawyer argued he only pleaded guilty to “a single regulatory count” under the Bank Secrecy Act.
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. pic.twitter.com/NsWeaJcVeK
— Elizabeth Warren (@SenWarren) October 23, 2025
Warren’s lawyer Ben Stafford responded in a Sunday letter obtained by Punchbowl News. He stated the threatened defamation claim would be “without merit.”
Stafford explained that Zhao pleaded guilty to violating the Bank Secrecy Act. This law is described by its enforcing agency as “our nation’s first and most comprehensive anti-money laundering statute.”
The guilty plea occurred in November 2023. Zhao admitted to failing to maintain an effective Anti-Money Laundering program at Binance.
A Seattle federal court sentenced him to four months in prison in April 2024. He served his sentence before receiving the pardon.
President Trump pardoned Zhao on October 23, 2025. The pardon drew criticism due to connections between Binance and Trump’s crypto venture.
Binance’s Role in Trump’s Crypto Venture
The Wall Street Journal and Bloomberg reported that Binance helped create World Liberty Financial’s stablecoin USD1. World Liberty Financial is a crypto venture connected to Trump’s family.
The USD1 stablecoin was used in a $2 billion transaction. Emirati state-owned investment firm MGX purchased a stake in Binance using the stablecoin in March.
Politico reported that Zhao’s pardon followed an expensive, months-long lobbying effort. Binance and its legal team worked to win over key figures in Trump’s orbit.
Legal Arguments Over Defamation
Stafford argued that Warren’s statement is “true in all respects and therefore cannot be defamatory.” He stated it “accurately represented publicly available and widely reported facts.”
He noted that public figures must prove “actual malice” to win defamation cases. This requires showing the defendant published a false statement knowing it was false or with reckless disregard for the truth.
Warren’s post received a community note on X. The crowdsourced comment outlined the specifics of Zhao’s guilty plea.
Goody Guillén stated in her letter that Zhao “will not remain silent while a United States Senator seemingly misuses the office.” She claimed Warren was publishing “defamatory statements that impugn his reputation.”
The letter demanded Warren retract statements in both her X post and a Senate resolution. The resolution sought to denounce Trump’s pardon of Zhao.
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.” He added that the post does not state Zhao pleaded guilty to any other money laundering charge.
The New York Post first reported on Zhao’s legal threat on Tuesday. Goody Guillén warned that Zhao could “pursue all legal remedies available to address these false statements” if Warren did not retract them.
