Binance’s CZ Threatens Legal Action Over USD1 Stablecoin Allegations
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Changpeng Zhao Denies Involvement in Trump-Linked Stablecoin
Changpeng Zhao (CZ), the co-founder and former CEO of Binance, has publicly rejected claims that he played a role in developing or backing USD1, a stablecoin linked to World Liberty Financial (WLF) — a firm tied to U.S. President Donald Trump.
In a post on the social platform X, Zhao labeled the report as a “hit piece” and stated that it was “sponsored by a competitor.” He warned that he “might have to sue again for defamation,” highlighting that the article was “filled with so many factual errors.”
Report Claims USD1 Was Developed by Binance
The now-controversial article alleged that Binance originally developed the smart contract code behind USD1. It further claimed that over 90% of USD1 tokens remain in Binance wallets, potentially earning millions in interest income annually.
Additionally, the report suggested that Zhao applied for a presidential pardon shortly after USD1 was used in a $2 billion UAE-based fund investment deal involving Binance — a claim Zhao strongly denies.
“This is complete misinformation. Binance has no connection with USD1,” Zhao emphasized, challenging the narrative linking Binance to Trump’s financial ecosystem.
CZ’s History of Legal Battles With Media
This is not the first time Zhao has confronted the media over alleged inaccuracies. In 2024, he secured an apology from the Chinese-language edition of a major financial outlet, which had previously accused Binance of operating a Ponzi scheme. That publication later issued a formal retraction, describing the article as “false and baseless.”
Zhao also disputed a report published in April 2025 that claimed he was cooperating with U.S. authorities to testify against other crypto executives, calling it a coordinated smear campaign.
Background: Trump’s Expanding Crypto Presence
The issue comes amid growing scrutiny of Donald Trump’s expanding crypto involvement, including World Liberty Financial, his official memecoin, and multiple campaign donations from crypto industry executives.
In parallel, U.S. lawmakers are considering key legislation, such as the GENIUS Act, aimed at regulating stablecoins. The bill passed the Senate in 2025 with bipartisan support and is central to shaping the future of digital currency compliance in the U.S.
Conclusion
As political tensions rise and regulatory frameworks tighten, the relationship between crypto leadership and government policy is under the spotlight. Zhao’s threat to take legal action underscores the growing sensitivity around misinformation in the crypto space and highlights the broader implications of stablecoin regulation and political affiliations.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
