Binance founder’s defamation threat rebuffed by Warren’s legal team

Senator Elizabeth Warren’s lawyers said the defamation threat by Binance founder Changpeng “CZ” Zhao has no basis. They stated that Warren’s post about his money laundering case was accurate because official records support it.

Warren’s lawyer, Ben Stafford, wrote to Zhao’s lawyer, Teresa Goody Guillén, and said Zhao “pleaded guilty to money laundering and was sentenced to prison.”

Warren’s lawyers say her post about Zhao’s conviction told the truth

Ben Stafford sent the letter, stating that there are public documents, court filings, and statements from the U.S. Department of Justice that support Warren’s post regarding Zhao’s conviction for money laundering. He explained that the Senator was doing her job as a U.S. lawmaker who oversees laws related to financial regulation and money laundering.

Stafford reminded Zhao’s legal team that the Department of Justice publicly said Zhao’s actions violated our nation’s first and most comprehensive anti–money laundering statute. He argued that even if Zhao threatened to sue, the facts remain true, and Warren had every right to repeat them.

The letter also cited the plea deal that Zhao signed in the case United States v. Changpeng Zhao (W.D. Wash. No. CR23-179). Zhao admitted that he “willfully aided and abetted” the failure of his company to set up and follow proper anti–money laundering procedures. Stafford said the same government agency that prosecuted Zhao made these statements official, so Warren’s reference to Zhao’s case was in no way false or defamatory.

The attorney went on to explain that Warren’s post on X was protected speech under both the Constitution and her duties as a lawmaker. He also said that even if her official immunity did not apply, Zhao would still have to prove “actual malice” to win such a case. But since several public records support her words, Zhao can’t really prove she acted with malice. 

He closed by saying that Zhao just wanted to intimidate a public official with threats. Stafford explained that his actions reveal a pattern of attempting to control the narrative surrounding his criminal case, rather than accepting responsibility. He also made it clear that Warren’s office will not be intimidated or silenced by legal threats from big players in the crypto industry. 

Zhao’s lawyers say Warren misstated the nature of his guilty plea

The disagreement began on October 28, when Zhao’s lawyer, Teresa Goody Guillén, accused the senator of stating that Zhao “pleaded guilty to a criminal money laundering charge and was sentenced to prison” on X.

She stated that they would file a defamation lawsuit because the senator’s words harmed Zhao’s image. She added that Zhao accepted responsibility for not enforcing anti–money laundering rules effectively, which was not the same as being personally involved in laundering money or financing illegal activities.

Ben Stafford rejected this argument in his letter, stating that the offense Zhao admitted to under the Bank Secrecy Act is explicitly criminal, not civil or regulatory. He explained that it carries criminal penalties outlined in Section 5322 of Title 31 of the United States Code titled Criminal Penalties.

Stafford said Warren only repeated what the Justice Department said when it made public the plea that Zhao made in November 2023 and called his actions “a criminal violation” of the Bank Secrecy Act. The claims that Guillén made could not hold up in court because the law itself said that Zhao’s offense was criminal and punishable by imprisonment.

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