Founder and former CEO of Binance, Changpeng Zhao, has for the past week been locked in a war of words and threats with Massachusetts Senator Elizabeth Warren.
The back and forth has the senator referring to the cryptocurrency entrepreneur as a “money launderer” and suggesting, “If Congress does not stop this kind of corruption (the pardoning of financial criminals), it owns it.”
Meanwhile, a lawyer for Zhao told the New York Post, “Mr. Zhao respectfully immediately requests the retraction of these false statements, both within the resolution and on X,” adding, “Mr. Zhao reserves his right to pursue all legal remedies available to address these false statements.”
Read more: Changpeng Zhao says WSJ was paid to smear him
Is this real life?
When Donald Trump pardoned Zhao, who had served a prison term for failing to maintain an effective anti-money laundering (AML) program at Binance, Warren took to X and the Senate floor to call out what appeared to be an obvious quid pro quo.
Namely that Zhao received a pardon not because there were questions about his guilt or that he had shown remorse, but rather because he’d supported Trump’s crypto businesses and investments and kindly requested a pardon.
On the Senate floor, Warren said, “Pardoning convicted crypto billionaires sends a message: If you have money and the right connections, you don’t have to follow the law. You get a special deal after you’ve broken the law.”
But the senator was less careful with her words on X, where she stated that Zhao “pleaded guilty to a criminal money laundering charge” — which isn’t true.
The former Binance executive has now, through his legal team, suggested that if Warren’s comment isn’t retracted, he’ll sue her for defamation.
Simultaneously, the Wall Street Journal is now reporting that Binance “facilitated [a] $2 billion purchase of World Liberty’s stablecoin and built its technology,” while “clemency for Changpeng Zhao surprised some in [the Trump] administration.”
Crypto and criminals rally around Zhao
Cryptocurrency executives, business leaders, and advocates have rallied around Zhao, stating that not only did he not deserve a prison sentence, he absolutely needs to take Warren to court for defamation. Even convicted financial criminals are getting in on the action:
Even convicted financial criminals are rallying round Zhao.
Read more: Changpeng Zhao accused of boosting fraudsters on X
But Warren hasn’t retracted her post on X and no lawsuits have thus far come to light.
While it’s clear that Warren mischaracterized the nature of Zhao’s guilty plea, a claim of defamation is more difficult to prove in court than simply showing that a mistake was made.
Indeed, to prove that a post is libellous, a plaintiff must prove that the statement was made negligently or with malice and caused reputational damage to the defendant.
It’s unclear if Warren’s X post meets this definition.
However, what is accurate is that a lawsuit against Warren by Zhao would open him up to discovery that could go on for months, cost millions of dollars, and potentially force the Binance founder to provide uncomfortable or embarrassing information that would be shared with the world.
Both Warren and Zhao have too much at stake to ever let this war of words go to trial. As such, what’s most likely is that no suit is brought and the slightly inaccurate post stays up.
At worst for Warren, she’s forced to characterize Zhao as someone who pleaded guilty to failing to maintain a proper anti-money laundering program, not simply a money launderer.
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