Binance founder Changpeng Zhao or CZ threatened to sue news agency Bloomberg for a second time over its report alleging links between the exchange and the USD1 stablecoin.
In an X post on Friday, CZ called the article “another hit piece” that was “sponsored by a competitor,” without explicitly naming the competitor. He dismissed it as a report meant to sow fear, uncertainty, and doubt, popularly referred to in crypto lingo as FUD.
CZ stated that the Bloomberg report contains “so many factual errors I don’t even know where to begin,” adding:
“Might have to sue them again for defamation.”
The contentious Bloomberg report
At the center of CZ’s legal threat is a Bloomberg report published on Friday. Citing three anonymous sources, the report alleged that Binance had developed the basic smart contract code that powers the USD1 stablecoin.
World Liberty Financial, a crypto firm linked to U.S. President Donald Trump and his sons, launched USD1 on May 22. The same day, The Wall Street Journal published a report claiming that CZ was playing the role of a ‘fixer,’ introducing the World Liberty Financial team to international dignitaries. CZ denied the claims in the report.
The launch of USD1 came nearly a month after World Liberty Financial founders met with CZ amid a global adoption push. Soon after, an Abu Dhabi-based firm made a $2 billion investment in Binance, which was settled using USD1. The Bloomberg report further claimed that nearly 90% of all USD1 remains in Binance’s wallets, potentially generating tens of millions of dollars in interest for the Trump family.
Soon after the Binance deal involving USD1, CZ sought a pardon from Trump. CZ was convicted and was released after four months in prison last year for failing to maintain appropriate guardrails on Binance to prevent money laundering.
The Bloomberg article claimed that CZ’s expectation of a pardon amid Binance’s close ties to World Liberty Financial raises questions of conflict of interest.
It is worth noting that the crypto community is overwhelmingly in support of CZ, with most users urging CZ to go ahead with the defamation lawsuit against Bloomberg.
CZ’s lawsuits against Bloomberg and other media
CZ has sued media agencies multiple times before. He sued Modern Media, a Hong Kong publisher for Bloomberg, for its July 6, 2022 magazine article alleging that CZ was operating a ponzi scheme. It’s worth noting that Bloomberg itself was not a party in the lawsuit.
In July last year, Modern Media issued an apology to CZ and Binance after it lost a two-year long legal battle. The news agency retracted the report titled “Changpeng Zhao’s Ponzi Scheme,” calling the headline “false and baseless.” At the time, Modern Media agreed to donate an agreed sum in lieu of paying damages.
Prior to the 2022 lawsuit, CZ had also sued Forbes in 2020 for a report alleging that Binance facilitated money laundering and deceived financial regulators. CZ, however, dropped the lawsuit in 2021. In 2022, Binance made a $200 million investment in Forbes.
CZ has also denied claims by other media outlets before. In April, CZ refuted a Wall Street Journal report alleging that he had agreed to testify against Tron founder Justin Sun as a smear campaign.
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