TLDR
- Former Binance CEO Changpeng “CZ” Zhao denied claims he agreed to testify against TRON founder Justin Sun as part of his plea deal with the US Department of Justice
- CZ called the Wall Street Journal report a “smear campaign” and suggested someone paid for negative coverage
- Justin Sun stated he was unaware of these rumors and described CZ as “both my mentor and a close friend”
- CZ served 4 months in prison after pleading guilty to Anti-Money Laundering violations and was released in September 2024
- Sun’s legal battle with the SEC was paused in February after he invested $75 million in Trump-backed DeFi project World Liberty Financial
Former Binance CEO Changpeng “CZ” Zhao has refuted claims that he agreed to testify against TRON founder Justin Sun as part of his plea deal with the US Department of Justice. The allegations appeared in an April 11 Wall Street Journal report that cited unnamed sources.
In response to the report, CZ took to social media platform X, writing “WSJ is really TRYING here,” and downplaying the claims. He suggested the report was artificially motivated, claiming someone may have paid the Wall Street Journal to lead a smear campaign against him.
Multiple people have told me again WSJ is writing another baseless hit piece about me. 4 😂
— CZ 🔶 BNB (@cz_binance) April 11, 2025
“People who become gov witnesses don’t go to prison. They are protected,” Zhao posted on X, implying that his prison sentence contradicts the claim that he cooperated with authorities against Sun.
The Legal Background
CZ was sentenced to four months in prison in April 2024 after pleading guilty to Anti-Money Laundering (AML) violations during his tenure as Binance CEO. He completed his sentence and was released from US federal prison in September 2024.
In clarifying the charges against him, CZ emphasized to BlockTower Capital founder Ari Paul: “To be clear, there were NO ‘money laundering’ or ‘fraud’ charges. You are confusing ‘ANTI-money laundering’ to ‘money laundering’. One is a failure to prevent/police. One is doing it yourself.”
With an estimated net worth of approximately $60 billion at the time of his incarceration, Zhao became the wealthiest person ever to serve a prison sentence in the United States.
Sun’s Response to Allegations
Justin Sun also responded to the WSJ report, stating he was not aware of the circulating rumors. “CZ is both my mentor and a close friend—he has played a crucial role in supporting me during my entrepreneurial journey,” the TRON founder said on X.
Sun maintained that he has direct and honest communication with both CZ and the US Department of Justice. He highlighted this relationship by noting that the DoJ is one of the closest and trusted partners of T3 Financial Crime Unit (T3 FCU), a blockchain security initiative co-founded by TRON, Tether, and TRM Labs.
I’m not aware of the circulating rumors. CZ is both my mentor and a close friend—he has played a crucial role in supporting me during my entrepreneurial journey. To this day, his conduct and principles remain the highest standard I strive to follow as a founder.
At the same…
— H.E. Justin Sun 🍌 (@justinsuntron) April 12, 2025
“To this day, his conduct and principles remain the highest standard I strive to follow as a founder,” Sun said of Zhao. “Whether it’s CZ or our partners at the DOJ, we maintain direct, honest communication at all times. I have full trust in each and every one of them.”
The Sun SEC Case Development
Sun’s own legal situation has seen recent developments. In February 2025, the US Securities and Exchange Commission and Sun asked a federal court to pause the regulator’s case against the crypto entrepreneur to allow for settlement talks.
This pause came shortly after Sun invested $75 million in World Liberty Financial, a Trump-backed DeFi project. This investment made Sun the project’s largest single investor, and he now serves as an advisor to the project.
The timing of the legal case pause following Sun’s huge cash injection into the Trump-backed crypto project has sparked corruption concerns. Two senior Democrats have written to the SEC seeking all records related to World Liberty Financial, with a focus on its dealings with Sun.
Sun had been facing charges related to insider trading and market manipulation before this pause in proceedings. The SEC initially sued Sun and three of his companies in March 2023, including the entity behind Tron, the Tron Foundation, and file-sharing platform BitTorrent.
CZ knew the WSJ report was coming, as he indicated that the “WSJ is writing another baseless hit piece” in an April 11 post on X before the article was published. He has also suggested—without providing evidence—that the WSJ article is part of a coordinated lobbying campaign against him and his former company in the US.
Both crypto leaders appear to be maintaining a united front against the allegations, with Sun expressing his continued trust in both CZ and American regulatory authorities despite the ongoing legal challenges they have faced.
