Changpeng Zhao Defamation Case Elizabeth Warren CZ Dispute

A major legal fight has broken out over the CEO of the crypto exchange Binance, Changpeng Zhao (CZ), and US Senator Elizabeth Warren. The issue started when Senator Warren claimed that CZ had “pleaded guilty to a criminal money laundering charge and was sentenced to prison” and then was “pardoned after he had financed Trump’s stablecoin”. CZ’s lawyer warned that they would sue Warren for slander if she did not retract her statements, calling them false and malicious. The incident has received considerable notice and has been viewed as a key moment in the battle between the regulator and the crypto industryIn her defence, one of the legal team for Zhao, Teresa Goody Guillén, expressed that Zhao had not been convicted of “criminal” money-laundering but rather diverted an issue under the Bank Secrecy Act. She then accused Warren of distorting the trial, saying that CZ was not even involved in the wrongdoing. The founder of the Binance exchange, who resigned as CEO as a part of the plea deal, is said to be so worried about the possibility of the public being led astray by Warren’s remarks and his reputation being tarnished in the world that he has to focus on his court case.Warren’s lawyer, Ben Stafford, countered the claim with a strong rebuttal, insisting that the senator’s remarks were “true in all respects.” Stafford argued that CZ, indeed, pleaded guilty to a criminal violation of the Bank Secrecy Act and was sentenced accordingly. He also asserted that the senator’s remarks were backed by “widely reported and verifiable” information and dismissed CZ’s claims as unfounded. Stafford argued that the senator’s remarks are in the area of protected speech, especially because they deal with issues of public concern relating to financial crime and cryptocurrency regulationIn the context of US defamation law, public figures like CZ are required to demonstrate that the statements in question were not only untrue but also made with “actual malice.” This latter term means that the speaker either knew the statement to be false or acted with a reckless disregard for the truth. Warren’s legal team insists that her statements were factually correct and thus could not be defamatory.

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