Binance Founder CZ Threatens Legal Action Over Alleged USD1 Stablecoin Links

Binance founder Changpeng Zhao, also known as CZ, has threatened to take legal action against a news agency for a report that alleged links between the exchange and the USD1 stablecoin. In a post on X, CZ referred to the article as "another hit piece" and suggested it was sponsored by a competitor, aiming to spread fear, uncertainty, and doubt within the crypto community.

CZ criticized the report for containing numerous factual errors and expressed his intention to sue for defamation. The contentious report, published on Friday, cited three anonymous sources claiming that Binance had developed the basic smart contract code for the USD1 stablecoin. World Liberty Financial, a crypto firm with ties to former U.S. President Donald Trump and his sons, launched USD1 on May 22. The same day, a report claimed that CZ was acting as a 'fixer,' introducing the World Liberty Financial team to international dignitaries, which CZ denied.

The launch of USD1 followed a meeting between World Liberty Financial founders and CZ, during a global adoption push. Subsequently, an Abu Dhabi-based firm invested in Binance, with the deal settled using USD1. The report further alleged that nearly 90% of all USD1 remains in Binance’s wallets, potentially generating significant interest for the Trump family. CZ had sought a pardon from Trump after being convicted for failing to maintain appropriate guardrails on Binance to prevent money laundering.

The report raised questions about a potential conflict of interest given CZ’s expectation of a pardon and Binance’s close ties to World Liberty Financial. The crypto community has largely supported CZ, with many users urging him to proceed with a defamation lawsuit against the news agency.

This is not the first time CZ has taken legal action against media outlets. In 2022, he sued a Hong Kong publisher for a magazine article alleging that he was operating a Ponzi scheme. The publisher issued an apology and retracted the report, calling the headline "false and baseless." Prior to this, CZ had also sued Forbes in 2020 for a report alleging that Binance facilitated money laundering and deceived financial regulators, although he later dropped the lawsuit. In 2022, Binance made a significant investment in Forbes.

CZ has also denied claims by other media outlets. In April, he refuted a report alleging that he had agreed to testify against Tron founder Justin Sun, dismissing it as a smear campaign. The ongoing legal threats and denials underscore CZ’s commitment to defending Binance’s reputation and addressing what he perceives as baseless allegations.