Binance co-founder CZ Denies USD1 Stablecoin Ties Amid Controversy

Binance co-founder and former CEO Changpeng “CZ” Zhao has strongly refuted a recent report that linked him to a stablecoin issued by World Liberty Financial. The report, which was published by a prominent news outlet, alleged that Binance played a significant role in the development, promotion, and revenue structure of USD1, a stablecoin associated with World Liberty Financial. The report claimed that USD1 reached a market capitalization of $2 billion shortly after its launch and exhibited a concentrated supply structure, raising questions about its distribution and control.

The report also highlighted claims that Binance was directly involved in the creation of USD1 and is believed to hold a substantial portion of the asset. Furthermore, transactions amounting to $32.8 million of a Trump-themed meme coin were reportedly traced to Binance wallets, adding to suspicions of financial ties between the two parties. USD1 is also listed on Binance, fueling speculation about the connection between Binance and World Liberty Financial.

In response to the report, CZ strongly denied the allegations. In a tweet, he referred to the article as containing "so many factual errors," labeling it as a hit piece possibly sponsored by a competitor. He further suggested potential legal action for defamation against the news outlet. "FUD. The article just wrote another hit piece (sponsored by a competitor) containing so many factual errors I don’t even know where to begin. Might have to sue them again for defamation," CZ tweeted.

World Liberty Financial also refuted the claims, accusing the news outlet of pushing a politically motivated narrative through false reporting. However, neither Binance nor World Liberty Financial has provided concrete evidence or offered specific counterarguments to substantiate their denials. The situation has prompted closer scrutiny of both USD1 and the relationships among involved parties. Investors and market watchers are awaiting further developments as tensions escalate over the controversial claims.

Zhao’s tweet referenced a previous legal dispute with the news outlet, linking to a July 2024 apology from the publication’s Chinese-language edition. The statement retracted a 2022 article accusing Binance of operating a Ponzi scheme, calling the headline “false and baseless.” At the time, the publication agreed to make a charitable donation instead of paying damages. Zhao pleaded guilty to one felony count as part of a settlement with US authorities in 2023. Although he had already served four months in prison, he said in May that he was seeking a presidential pardon from Trump. Such a pardon could potentially allow Zhao to return to a managerial or operational role at a US crypto business.

Trump’s crypto ventures, including World Liberty Financial, his official memecoin, and crypto executive campaign contributions, have attracted scrutiny from US lawmakers since before he took office. Republican leaders in the House are set to consider three crypto bills, including the GENIUS Act, which regulates payment stablecoins. The bill passed the Senate with bipartisan support despite initial Democratic opposition due to Trump’s crypto interests.

In April, Zhao also dismissed a report that claimed he had agreed to provide evidence against Tron founder Justin Sun as part of a plea deal with the United States Department of Justice. “They seem to have forgotten who went to prison and who didn’t,” Zhao wrote in an April 12 X post. “People who become gov witnesses don’t go to prison. They are protected. I heard someone paid employees to smear me.”