Binance co-founder Denies USD1 Stablecoin Allegations Threatens Legal Action

Binance co-founder Changpeng “CZ” Zhao has vehemently denied recent allegations linking him to the Trump-backed USD1 stablecoin, asserting that the claims are defamatory and threatening legal action. The allegations, which surfaced in a recent report, suggested that Binance was involved in developing the smart contract for USD1 and that Zhao sought a presidential pardon following a significant $2 billion deal involving the stablecoin. Zhao has categorically denied these assertions, describing the report as a “hit piece” filled with inaccuracies.

According to Zhao’s statements, the report is part of a pattern of false claims made against him and Binance. He highlighted that this is not the first time he has had to confront such allegations, referencing a previous incident in 2022 where a report falsely labeled Binance as a Ponzi scheme. That report was later retracted, and an apology was issued.

Zhao’s legal history includes a 2023 guilty plea to a felony charge as part of a settlement with U.S. authorities, which resulted in a four-month prison sentence. Since his release, he has publicly sought a presidential pardon, a move that could allow him to re-engage in managerial roles within U.S.-based crypto enterprises. This pursuit has drawn attention amid ongoing regulatory scrutiny of Trump’s crypto-related ventures, including World Liberty Financial (WLF) and his official memecoin.

The regulatory environment surrounding stablecoins and major crypto players like Binance is complex and evolving. The GENIUS Act, which regulates payment stablecoins, recently passed the Senate with bipartisan support. This legislation underscores the need for clear regulatory frameworks and transparent corporate governance within the crypto ecosystem.

Beyond the recent allegations, Zhao has also publicly challenged reports from other major outlets. In April, he refuted an article alleging that he agreed to cooperate with U.S. authorities against Tron founder Justin Sun as part of a plea deal. Zhao emphasized that such claims were misleading and possibly motivated by smear campaigns, highlighting the contentious relationship between him and certain financial news organizations.

These media disputes reflect broader tensions within the crypto industry regarding transparency, legal accountability, and media representation. The allegations and subsequent denials have significant implications for Binance’s reputation and regulatory standing. As one of the largest cryptocurrency exchanges globally, Binance’s involvement with stablecoins linked to politically sensitive figures adds layers of complexity to its compliance and public perception.

For investors and industry observers, these developments serve as a reminder to critically evaluate media reports and seek verified information amid a landscape often marked by competing narratives and regulatory uncertainty. The high stakes involved in crypto media coverage and regulatory scrutiny underscore the need for accurate reporting and transparent corporate governance within the industry.

Changpeng Zhao’s firm rejection of the USD1 stablecoin allegations and his readiness to pursue legal remedies highlight the critical juncture at which the crypto industry finds itself. As U.S. lawmakers advance stablecoin regulations and Binance navigates ongoing legal challenges, the industry must prioritize transparency, compliance, and accurate reporting for sustainable growth.