Binance founder Changpeng 'CZ' Zhao has threatened to sue US Senator Elizabeth Warren for defamation, escalating tensions between Washington and the crypto industry, days after his presidential pardon by Donald Trump.
CZ Threatens to Sue Senator Warren Over Money-Laundering Claims
3 November 2025 - 16:00 CET
By Stu Clelland
Warren, a senior member of the Senate Banking Committee, has been one of the administration's fiercest critics on digital assets. She has questioned Trump’s embrace of crypto and criticized the GENIUS Act, the law creating the first federal framework for stablecoin oversight.
The dispute erupted after Warren posted on X that Zhao was pardoned on money-laundering charges because he 'financed President Trump’s stablecoin.' The post quickly drew scrutiny as X added a fact-check clarifying that Zhao’s conviction was for failing to maintain an effective anti-money-laundering program under the Bank Secrecy Act, not for laundering funds.
Earlier this year, Zhao struck a deal with an Emirati investment group that included $2.1bn in financing using USD1, the stablecoin linked to Trump’s business network. The link has deepened scrutiny over the growing overlap between US politics and digital assets.
Zhao Strikes Back
Zhao’s attorney, Teresa Goody Guillén, demanded that Warren retract the post, calling it false and reputationally damaging.
“Mr. Zhao will not remain silent while a United States Senator misuses the office to publish defamatory statements,” Guillén wrote in a letter cited by several media outlets.
Zhao, who served four months in prison and paid a $50mn fine, maintains that his case involved compliance failures rather than laundering funds. His pardon formally clears his US criminal record and allows his return to the American market.
Warren’s Defense
In a letter obtained by Punchbowl News, Warren’s lawyer Ben Stafford defended her comments as 'true in all respects.' He said Zhao pleaded guilty to violating the Bank Secrecy Act, the nation’s principal anti-money-laundering statute, and argued that Zhao faces a high legal bar to prove defamation as a public figure.
The feud adds a political dimension to Trump’s decision to pardon Zhao, a move Democrats have labeled “crypto-linked corruption.” Warren and other lawmakers have introduced a resolution seeking an inquiry into the pardon and renewed calls for tighter digital-asset oversight in Washington.
Trump told CBS News that he had "Never heard of CZ" and pardoned him only after learning the former Binance executive was the victim of a “witch hunt” by the Biden administration.
