- In a letter from her lawyer, US Senator Elizabeth Warren has defended herself against threats of defamation from former Binance CEO, Changpeng ‘CZ’ Zhao, claiming her X comments about his past legal troubles are true.
- The dispute stems from comments Warren made on social media platform X about CZ’s sentencing for breaches of the Banking Secrecy Act.
US Senator Elizabeth Warren has hit back against former Binance CEO Changpeng ‘CZ’ Zhao’s defamation threats following a social media post regarding his guilty plea and subsequent imprisonment for his failure to implement an effective anti-money laundering program at Binance.
Warren’s comments were made shortly after Donald Trump pardoned CZ in late October. She took to X to claim that “CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison.” She also said he was subsequently pardoned after he “financed President Trump’s stablecoin.”
CZ took issue with Warren’s description of his offending, posting that “there were NO money laundering changes [sic].” CZ’s lawyer, Teresa Goody Guillén, reportedly contacted Warren, threatening defamation if the post wasn’t deleted.
“Mr. Zhao will not remain silent while a United States Senator seemingly misuses the office to repeatedly publish defamatory statements that impugn his reputation,” Goody Guillén reportedly wrote in the draft letter.
Warren’s lawyer, Ben Stafford, subsequently fired off a letter to CZ’s lawyers asserting that everything Warren said in her post is true, and therefore cannot be defamation.
Senator Warren accurately represented publicly available and widely reported facts. The “charge” referenced in Senator Warren’s X post refers to the “charge” to which Mr. Zhao pled guilty and as to which President Trump had just pardoned him.
Ben Stafford, Senator Warren’s lawyer
Related: Binance Founder CZ Sentenced to Four Months in Prison
CZ did, in fact, serve time in prison in 2024 for his part in Binance’s failure to comply with anti-money laundering regulations.
In handing down CZ’s four-month prison term, U.S. District Judge Richard Jones said that the former Binance CEO “had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with,” and that he had failed to do so.
Prior to sentencing, CZ apologised to the court for his actions, adding, “I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program … I realize now the seriousness of that mistake.”
Argument Centres on Whether CZ Got Hit With ‘Regulatory Count’ or Criminal Charge
In her letter on behalf of CZ, Goody Guillén reportedly claimed that Warren had mischaracterised the charge against her client as criminal, when it was really just a “regulatory count” and in any case, CZ didn’t really do anything wrong, Binance did (never mind the fact he was the CEO at the time).
Hitting back at this claim, Stafford (Warren’s lawyer) reminded CZ what he admitted during his legal case, writing that he “plead guilty to a criminal violation of the Bank Secrecy Act – described by its enforcing agency as ‘our nation’s first and most comprehensive anti-money laundering statute’” and noted that “‘regulatory penalties’ do not exist,” for this offence.
Stafford also noted that CZ “admitted, under oath, that he wilfully aided and abetted and caused Binance to fail to develop, implement, and maintain an effective AML program, and that this constituted the identified crime.”
Related: Trump Pardons Crypto Titan CZ, Declares ‘War on Crypto’ Over
Stafford explained that because her comments were entirely truthful, CZ wouldn’t be able to establish the necessary elements — that Warren both lied and did so with malice — to prove defamation.
A public figure such as Mr. Zhao cannot prevail on a defamation claim without presenting evidence that the defendant published a false statement of fact with actual malice.
Ben Stafford, Senator Warren’s lawyer
“Here…Senator Warren’s statement is completely accurate. In any event, the standard is speech-protective,” he said.
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