Binance co-founder denies Trump stablecoin link, threatens legal action

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, a company associated with former US President Donald Trump. Zhao, in a post on X, described the article as a “hit piece (sponsored by a competitor)” filled with “so many factual errors” that he was considering legal action for defamation. The report alleged that Binance developed the original smart contract code for USD1, a stablecoin issued by World Liberty Financial, and that Zhao had applied for a presidential pardon shortly after USD1 was used in a $2 billion deal involving a UAE-based fund’s investment in Binance. The report also claimed that more than 90% of USD1’s tokens remained in Binance wallets, potentially generating tens of millions in annual interest revenue.

Zhao’s response referenced a previous legal dispute with Bloomberg, 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, Bloomberg 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.

The timing of the article comes as Trump’s crypto presence—including campaign-linked tokens, stablecoins, and fintech partnerships—faces increased scrutiny from lawmakers. On Capitol Hill, Republicans are pushing forward with new legislation like the GENIUS Act, a stablecoin regulatory bill that recently passed the Senate, despite Democratic concerns over Trump’s financial ties to crypto ventures.

Zhao’s legal threats against Bloomberg come amidst a broader context of scrutiny and legal challenges faced by the crypto industry. The allegations and subsequent denials highlight the complex and often contentious relationship between major financial publications and the crypto industry. The potential legal action by Zhao underscores the importance of accurate reporting and the consequences of defamatory claims in the highly competitive and regulated world of cryptocurrency.