The crypto world rarely sees a quiet day, but recent events have stirred up a particular kind of storm. Changpeng Zhao, once the head of Binance, is now pushing back hard against statements made by Senator Elizabeth Warren. His lawyer has sent a clear message: retract those remarks, and do it now.
- Changpeng Zhao’s lawyer has formally demanded that Senator Elizabeth Warren retract her statements, threatening legal action for defamation. This pushback follows President Trump’s pardon of Zhao, who had previously pleaded guilty to failing to maintain an effective anti-money laundering program.
- Senator Warren criticized the pardon, circulating a resolution with Senator Adam Schiff to block it and alleging abuse of office and enrichment of the Trump family.
- Zhao’s legal team has countered these claims, particularly regarding the alleged enrichment, by focusing on the nature of a stablecoin transaction involving Binance and a DeFi project, arguing it’s factually and economically unsound.
This isn’t just about a heated exchange. We are talking about a formal demand for an “immediate retraction” from a United States Senator. It follows President Trump’s pardon of Zhao, a move that certainly got people talking.
Zhao’s lawyer, Teresa Goody Guillén, sent a letter to Senator Warren, a leading Democrat on the Senate Banking Committee. The letter asks for a reversal of statements found in a recently filed resolution. There’s even talk, reported by Fox News’ Charles Gasparino, that Zhao might sue Warren for libel.
Goody Guillén did not mince words. “Mr. Zhao will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements that impugn his reputation and cause him further injury,” she wrote in the letter. The Block obtained a copy of this correspondence.
The Pardon and the Pushback
President Trump pardoned Zhao last week. This came after Zhao pleaded guilty in 2023. His charge involved failing to maintain an “effective anti-money laundering program.” It was a significant legal moment for the crypto space.
Zhao also faced a $50 million fine. Binance, the exchange he founded, agreed to pay a staggering $4.3 billion. This was part of one of the largest corporate settlements ever recorded. Zhao had been released from prison last year, so the pardon came after his time served.
Senator Warren reacted swiftly to the pardon. She took to X, a social media platform, to voice her disapproval. She stated that Zhao pleaded guilty to a criminal money laundering charge. This was a direct criticism of President Trump’s decision.
Warren, along with Senator Adam Schiff, then circulated a resolution. This document urged Congress to block what they called “this blatant corruption.” It signaled a strong political stance against the pardon.
The situation gets a bit tangled when we look at other reports. The Wall Street Journal suggested that Zhao had lobbied President Trump’s administration for a pardon. Zhao has denied this report, but questions persist.
These questions often point to ties between a DeFi (decentralized finance) project called World Liberty Financial (WLF), which President Trump supports, and Binance. WLF reportedly held talks about buying a stake in Binance. That certainly raises eyebrows in our corner of the financial world.
About six weeks after news of these talks surfaced, an Abu Dhabi investment firm named MGX made an announcement. MGX said it would use World Liberty’s USD1 stablecoin to complete a $2 billion deal with Binance. A stablecoin, if you are wondering, is a type of cryptocurrency designed to hold a stable value, often pegged to a fiat currency like the US dollar.
Allegations of Enrichment and the Defense
Senator Warren continued her line of argument in a “Dear Colleague” letter. The Block also obtained this letter. In it, Warren claimed President Trump was abusing the Oval Office. She also suggested the Trump family had grown richer since the administration began.
Goody Guillén directly challenged these claims. She focused on the MGX deal. “Your insinuation that MGX’s equity purchase in Binance, whereby the consideration was a U.S. dollar-backed stablecoin issued by World Liberty Financial, somehow ‘enriched’ President Trump and his family is factually and economically unsound,” she wrote.
It’s a strong counterpoint. Goody Guillén then pressed the issue further. “If holding USD1 constitutes unlawful enrichment, then every exchange listing that token would be guilty of the same offense,” she added. “You do not allege that because you cannot.”
This argument suggests that if the stablecoin itself is the issue, then many other entities would be in the same boat. It’s a way of highlighting what she sees as a logical flaw in Warren’s accusation. Goody Guillén brings a good deal of experience to the table.
She previously served as a litigation counsel for the Securities and Exchange Commission (SEC). She was also considered a top candidate to lead the agency at one point. Today, she is a partner at Baker & Hostetler LLP, a well-known law firm. Her background certainly lends weight to her statements.
I reached out to Senator Warren’s team for comment on the letter. They did not respond to the request. This leaves a gap in the public conversation, at least for now.
This entire episode shows how deeply intertwined crypto, politics, and legal battles have become. What started as a pardon has quickly escalated into a high-stakes dispute over reputation and influence. It makes you wonder what the next chapter in this story will bring, doesn’t it?
