(MENAFN- Crypto Breaking) A recent exchange highlights the escalating tension between U.S. political figures and prominent figures in the cryptocurrency industry. Senator Elizabeth Warren's legal team has pushed back against allegations made on social media that she defamed Binance founder Changpeng Zhao, following controversy over his presidential pardon. The dispute underscores the growing scrutiny and heated debates surrounding crypto regulation, legal accountability, and reputational risks in the evolving blockchain space.

• Elizabeth Warren's lawyer dismisses claims that a social media post defamed Binance's Zhao, asserting the post was factually accurate.
• The controversy stems from Warren's X post linking Zhao's guilty plea to money laundering charges with his purported role in securing Trump 's pardon.
• Zhao's legal team demands a retraction, arguing the senator's statements are baseless and unfairly damage his reputation.
• Both sides cite publicly available information - Zhao's guilty plea and the circumstances of Trump's pardon - as key points of contention.
• The case highlights ongoing debates over crypto-related political influence and the importance of accurate legal and public communications in the industry.

A lawyer for U.S. Senator Elizabeth Warren has challenged allegations that her social media post defamed Binance founder Changpeng Zhao amid ongoing discussions about crypto regulation and political influence. The dispute arose after Zhao's attorney, Teresa Goody Guillén, threatened to sue Warren for“defamatory statements” made on X (formerly Twitter) that linked Zhao's pardon to corruption and money laundering allegations.

The New York Post reported that Guillén demanded Warren delete her October 23 post, which mentioned Zhao's criminal case and Trump's pardon, asserting that the senator's statement was false. Warren's attorney, Ben Stafford, responded in a legal letter obtained by Punchbowl News, asserting that Warren's post was factually accurate and protected as opinion, emphasizing that Zhao pleaded guilty to violating anti-money laundering laws-an assertion Zhao vigorously denies.

In her post, Warren stated Zhao“pleaded guilty to a criminal money laundering charge and was sentenced to prison,” which Zhao quickly rebuffed, asserting“there were NO money laundering [charges].” Zhao's guilty plea, which involved failing to maintain an effective AML program, was entered in November 2023, resulting in a four-month prison sentence this April.

Statement needs“actual malice,” lawyer argues

Zhao's legal team claims that Warren's statement lacks“actual malice” and is therefore not defamatory, citing the legal standards for public figures. Warren's post also alleged that Zhao“financed President Trump's stablecoin and lobbied for a pardon,” linking him to controversial financial dealings involving Binance and a related stablecoin, USD1, used in multimillion-dollar transactions.

Warren's X post was annotated with a“community note” clarifying Zhao's guilty plea. Source: Elizabeth Warren

Financial outlets like the Wall Street Journal and Bloomberg have reported that Binance played a role in creating the US dollar-pegged stablecoin USD1, which was used in investments like a $2 billion deal with a United Arab Emirates state-backed entity. These revelations add complexity to the broader issue of cryptocurrency's intersection with global finance and politics.

According to Politico, Zhao's presidential pardon followed months of intensive lobbying efforts by Binance and its legal team to gain favor in Washington, a move that has attracted scrutiny about potential conflicts of interest in the crypto industry's political connections.

In the legal response, Stafford argued that Warren's statements are grounded in facts as publicly reported and that Zhao's reputation should not be compromised over truthful disclosures. He emphasized that Zhao's guilty plea was related solely to AML law violations-not money laundering charges per se.

Zhao's lawyer calls for retraction

Guillén, Zhao's attorney, criticizes Warren's post as a misuse of her office to disseminate damaging falsehoods. The lawyer urged Warren to retract her statements or face potential legal action, asserting her claims distort the facts surrounding Zhao's legal case.

Guillén's letter stated that Warren's references to Zhao's guilty plea and the political implications of Trump's pardon were inaccurate and should be corrected. The dispute underscores the sensitive nature of political narratives around crypto entrepreneurs, especially when linked to high-profile legal cases and national interests.

This incident exemplifies the ongoing debate over how misinformation and public figures' statements influence perceptions of the digital asset sector, emphasizing the importance of verified, transparent communication in a rapidly evolving crypto landscape.

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