Former Binance CEO Changpeng Zhao is launching a legal challenge against U.S. Senator Elizabeth Warren, demanding she retract statements critical of his recent presidential pardon by Donald Trump.
Zhao’s lawyer, Teresa Goody Guillén, sent a formal letter this week requesting a public retraction of Warren’s accusations. The legal team is considering a defamation lawsuit, potentially escalating a significant dispute between the cryptocurrency industry and a prominent U.S. legislator.
Senator Warren, who chairs the powerful Senate Banking Committee, has been a vocal critic of the crypto sector. Her challenged statements followed Trump’s pardon of Zhao, which came less than two years after Zhao pleaded guilty to failing to maintain an effective anti-money laundering program at Binance.
Zhao was released from prison last year. As part of his judicial agreement, he paid a $50 million fine and agreed to step down as CEO of Binance.
Warren reacted sharply to Trump’s pardon on social media, accusing the former president of “whitewashing corruption.” Alongside Congressman Adam Schiff, she subsequently introduced a congressional resolution aimed at blocking what she termed “blatant corruption.”
The controversy has been further fueled by reported links between Binance and World Liberty Financial (WLF), a decentralized finance project backed by Trump. News outlets reported that WLF had held discussions about acquiring a stake in Binance.
Approximately six weeks after these reports, Abu Dhabi investment firm MGX announced a $2 billion transaction with Binance. This deal involved the use of USD1, a stablecoin issued by World Liberty Financial.
These connections have led to accusations that financial interests linked to Trump might have indirectly benefited from Zhao’s pardon. Zhao’s defense team vehemently denies these claims.
In her letter, Goody Guillén dismissed Warren’s assertions as “factually and economically unsustainable.” She specifically challenged the insinuation that the MGX-Binance transaction enriched Trump.
“If holding USD1 constitutes illicit enrichment, then every exchange listing that token would be guilty of the same crime,” Guillén wrote, adding, “You do not allege that, because you cannot.”
Goody Guillén is a former legal advisor to the U.S. Securities and Exchange Commission (SEC) and a partner at the law firm Baker & Hostetler LLP. Warren’s office has not yet responded to requests for comment regarding the legal communication.
This legal dispute underscores the increasing politicization of cryptocurrencies in the United States. It highlights the growing divide between regulators and politicians over industry oversight and influence in Washington.