Warren's Lawyer Rebuts Defamation Claims from Binance Founder CZ

Key Takeaways

• Elizabeth Warren's lawyer responds to Changpeng Zhao's threat of a defamation lawsuit.
• The dispute stems from a tweet by Warren accusing Zhao of "money laundering" and linking it to Trump's pardon.
• Warren's lawyer argues the tweet reflects publicly available facts and any defamation claim is meritless.
• Zhao's lawyer demands Warren retract her statements or face legal action.

Detailed Analysis

Following former US President Donald Trump’s pardon of Binance founder Changpeng Zhao, a lawyer for US Senator Elizabeth Warren has hit back at allegations that she defamed Zhao in a social media post. The New York Post reported that Zhao’s lawyer, Teresa Goody Guillén, threatened to sue Warren for “defamatory statements that impugn his reputation” unless she removed an Oct. 23 X post that cited “corruption” in Trump’s pardon of Zhao that same day.

Warren’s lawyer Ben Stafford said in a letter to Goody Guillén on Sunday that “any threatened defamation claim would be without merit,” as the law Zhao “pled guilty to violating is an anti-money laundering law.”

Warren said in her X post that Zhao “pleaded guilty to a criminal money laundering charge and was sentenced to prison,” which Zhao rebuffed online days later, saying “there were NO money laundering [charges].”

"Actual Malice" Required for Defamation Claim

Zhao pleaded guilty in November 2023 to failing to maintain an effective Anti-Money Laundering program at Binance in violation of the Bank Secrecy Act, and a Seattle federal court sentenced him to four months in prison in April 2024.

Warren’s X post also referenced that Zhao “financed President Trump’s stablecoin and lobbied for a pardon,” adding to criticism of Trump’s pardon due to ties between Binance and his family’s crypto venture, World Liberty Financial. The Wall Street Journal and Bloomberg have reported that Binance helped create World Liberty’s stablecoin USD1. This stablecoin was also reportedly involved in a $2 billion deal where the Emirati state-owned investment firm MGX acquired a stake in Binance in March. Politico reported on Oct. 25 that Zhao’s pardon came after Binance and its legal team undertook an expensive, months-long effort to win over key figures in Trump’s orbit.

Stafford, Warren’s lawyer, argued in the letter that Warren’s X post “is true in all respects and therefore cannot be defamatory,” and that it “accurately represented publicly available and widely reported facts.” He further stated, “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.”

Zhao's Legal Team Demands Retraction

Zhao’s lawyer, Goody Guillén, said in the letter that he “will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements that impugn his reputation.” The letter demanded that Warren retract statements in both her X post and a Senate resolution seeking to denounce Trump’s pardon of Zhao, or Zhao could “pursue all legal remedies available to address these false statements.”

Stafford countered that Warren’s X post “simply references the fact that Mr. Zhao pled guilty to a violation of U.S. anti-money laundering law.” The letter emphasized: “Her X Post does not state – and should not be construed to state – that he pled guilty to any other money laundering charge.”