Binance's CZ Denies DOJ Plea Deal Allegations

Changpeng “CZ” Zhao, the former CEO of Binance, has vehemently denied allegations that he agreed to provide evidence against Tron founder Justin Sun as part of a plea deal with the United States Department of Justice (DOJ).

In a recent report, unnamed sources claimed that CZ had agreed to testify against Sun under the terms of his settlement with US prosecutors. This arrangement, which had not been previously reported, was cited by sources familiar with the matter. CZ, however, took to social media to refute these claims, stating that individuals who become government witnesses do not go to prison and are instead protected. He also suggested that the report was a smear campaign, implying that someone had paid employees to defame him.

CZ was sentenced to four months in prison in April 2024 for Anti-Money Laundering (AML) violations. He was released from federal prison on Sept. 27, 2024, with a net worth of $60 billion at the time, making him the wealthiest person to ever serve a US prison sentence. In a separate post, CZ claimed that multiple individuals had warned him about the intentions to publish what he described as a “hit piece.”

Justin Sun, the founder of Tron, responded to the allegations by stating that he was “not aware of the circulation rumors” and referred to CZ as his “mentor and close friend.”

CZ further speculated that the report could be linked to lobbying efforts against him and his former company. He mentioned rumors about certain players lobbying against them in the US. In November 2023, Zhao had cited a Federal Newswire report stating that FTX sought a regulatory “crack down” on Binance to increase market share. These comments come over a month after crypto donations raised influence concerns among industry participants.

Crypto firms have been spending significant amounts on US elections, which presents critical challenges. According to a report, these political donations further erode public trust and expose companies to legal, reputational, and business risks that cannot be ignored. CZ’s denial of the allegations and his speculation about lobbying efforts highlight the complex and often contentious nature of the cryptocurrency industry’s interactions with regulatory bodies and political entities.