- Senator Elizabeth Warren is defending a social media post decrying the pardon of Binance founder Changpeng Zhao.
- In that post, Warren said Zhao had “pleaded guilty to a criminal money laundering charge” and called his pardon “corrupt.”
- An attorney for Zhao has called the statement “defamatory” and threatened to sue.
A lawyer for US Senator Elizabeth Warren is defending a recent social media post in which the anti-crypto lawmaker decried “corruption” that led to the October 23 pardon of Binance founder Changpeng Zhao.
A lawyer for Zhao, better known as CZ, has threatened to sue the senator, calling her post “defamatory,” according to the New York Post.
Warren’s lawyer hit back on Sunday, according to a letter obtained by Punchbowl News.
“Simply put, any threatened defamation claim would be without merit,” Warren attorney Ben Stafford wrote.
Prison and pardon
In 2023, Zhao pleaded guilty to violating the Bank Secrecy Act when he led Binance, the world’s largest crypto exchange.
Specifically, he admitted Binance had failed to prevent criminals, sanctioned entities, and other bad actors from laundering billions of dollars in dirty money under his leadership.
In addition to his guilty plea, Zhao agreed to resign as CEO and pay a $50 million fine. He was later sentenced to four months in prison.
Since the reelection of US President Donald Trump, Zhao has quietly campaigned for a pardon, according to news reports that have prompted an occasional rebuke from the crypto mogul.
On October 23, Trump pardoned Zhao. White House Press Secretary Karoline Leavitt told DL News that Zhao had been “prosecuted by the Biden Administration in their war on cryptocurrency.”
With Zhao’s pardon, that war was “over,” Leavitt said.
Retraction request
Democrats quickly jumped on the news.
Maxine Waters, the top Democrat on the House Financial Services Committee, has repeatedly criticised the decision, saying the pardon sends a “dangerous and reckless message to white-collar criminals and the entire cryptocurrency industry.”
Warren, meanwhile, took to X shortly after the news of Zhao’s pardon first broke.
“CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison. But then he financed President Trump’s stablecoin and lobbied for a pardon,” she wrote on X on October 23.
“If Congress does not stop this kind of corruption, it owns it.”
Teresa Goody Guillen, an attorney for Zhao, told the Post that her boss was mulling a lawsuit.
“Mr. Zhao will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements,” Goody Guillen wrote in a draft letter obtained by the Post.
“Accordingly, Mr. Zhao respectfully immediately requests the retraction of these false statements.”
Zhao’s lawyer wasn’t the only person who took issue with the way Warren characterised his guilty plea.
A crowdsourced “community note” was appended to Warren’s X post that read, “CZ pleaded guilty to violating the Bank Secrecy Act for failing to implement an effective anti-money laundering program. He did not plead guilty to money laundering.”
Bank Secrecy Act
Warren has nothing to apologise for, according to Stafford.
Responding to an October 28 letter from Goody Guillén, Stafford said Zhao had, in fact, pleaded guilty to “a money laundering charge.”
Zhao had pleaded guilty to a violation of the Bank Secrecy Act, which is “widely referred to as an anti-money laundering law, including by federal agencies and courts,” Stafford wrote.
Moreover, even if Warren’s post wasn’t entirely accurate, it wasn’t made “with malice” — a required element of any defamation lawsuit.
“Among other things, ‘minor inaccuracies do not amount to falsity so long as “the substance, the gist, the sting, of the libelous charge [is] justified,’” Stafford wrote, citing a 1991 court ruling.
Still, Warren’s attorney insisted the senator was only referring to the charge Zhao had pleaded guilty to.
““Her X Post does not state — and should not be construed to state — that he pled guilty to any other money laundering charge,” he wrote.
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Email him at aleks@dlnews.com.
