Binance Founder CZ Sue Senator Warren On False Money Laundering Claim

Binance Founder CZ Changpeng Zhao plans to file a defamation lawsuit against U.S. Senator Elizabeth Warren for allegedly spreading false claims linking him to money laundering after Trump’s presidential pardon.

What Was the Whole Story?

After U.S. President Donald Trump pardoned Binance founder Changpeng Zhao last week, political tension around the crypto industry reignited.

Senator Elizabeth Warren, a vocal critic of both Trump and cryptocurrency, accused Changpeng of being involved in money laundering — a claim that has sparked legal threats from Zhao’s side.

Zhao, who stepped down as Binance CEO last year following a plea agreement with the U.S. Department of Justice (DOJ), insists that Warren’s statements are false and damaging.

His legal team says her words misrepresent the facts and deliberately attack his integrity and the reputation of Binance.

What did Elizabeth say?

Right after Trump pardoned Zhao, Warren posted on X (formerly Twitter):

“ Zhao pleaded guilty to a criminal money laundering charge and was sentenced to prison. Then he financed President Trump’s stablecoin and lobbied for a pardon. Today, he got it.”

She also introduced a Senate resolution condemning the pardon and accused Trump of corruption for allegedly favoring his crypto allies.

Current Scenario

Through his lawyer Teresa Goody Guillen, CZ has issued a formal letter demanding Warren publicly retract her remarks. If she fails to do so, he plans to move ahead with a defamation lawsuit. The letter accuses Warren of using her Senate position to mislead the public and spread defamatory statements about Zhao’s legal history.

Source: WatchGuru X

Why Binance Founder CZ Plans to Sue Elizabeth

CZ’s team argues that Elizabeth's statements are completely false and damaging to his reputation in the global crypto community. His lawyer claims the senator “misused her position” to spread misleading information for political gain.

The legal notice demands she retract her comments both on social media and in official documents, warning that failure to do so will lead to a defamation lawsuit.

What’s the Actual Truth?

Contrary to the U.S. senator's claims, CZ was not convicted of money laundering. He pleaded guilty to violating the Bank Secrecy Act, a compliance-related issue involving Binance’s internal controls.

The DOJ clearly stated there was no evidence of money laundering or fraud. CZ served four months in jail, paid a $50 million fine, and stepped down as Binance’s CEO.

Even X (Twitter) fact-checkers added context to Senator's post, clarifying that CZ’s case involved failure to implement proper anti–money laundering measures, not actual laundering crimes.

Legal Complications

Suing a U.S. senator for defamation is legally difficult. Lawmakers are generally protected under the Speech or Debate Clause, which shields them from official statements made in Congress.

However, experts say Warren’s social media post might not be covered under that protection. To win, CZ must prove Warren knowingly spread false information or acted with “actual malice.”

Political Angle of This Case

This is not just a matter of personal defamation, but the widening political divide on cryptocurrency in the United States, as Elizabeth has long demanded stricter regulation of the crypto industry, and Trump has become a fan of digital money and even started his own crypto-related business.

This legal case against CZ was filed against allegations that the pardons granted by Trump crypto allies , which have become the story of the war on crypto in Washington.

What's Ahead?

In case Warren does not withdraw her statements, CZ is likely to continue with the suit. The result may offer a precedent that is significant in terms of the extent to which legislators may go when they criticize people online.