Binance co-founder Changpeng "CZ" Zhao has alarmed the crypto world by threatening to sue Bloomberg over a report that links him and the exchange to the Trump-backed USD1 stablecoin. The dispute has reignited debate about political influence and conflicts of interest in digital assets.
CZ publicly dismissed Bloomberg’s article as “FUD,” calling it a hit piece sponsored by competitors and filled with factual errors. He hinted at legal action, saying he may have to sue the publication for defamation once again.
Could Binance’s involvement with Trump’s stablecoin spark a new legal war?
According to Bloomberg, Binance wrote the original smart contract code for USD1, a stablecoin issued by World Liberty Financial, a company closely tied to former President Donald Trump and his family. The report alleges that Binance not only coded but also promoted and acted as an early adopter of USD1.
The controversy deepened after it was revealed that more than 90% of USD1’s total supply is held in Binance wallets, potentially generating tens of millions of dollars in annual interest for the Trump family. A UAE-based fund's stake in Binance reportedly used the stablecoin in a $2 billion investment deal.
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Over 90% of the USD1 stablecoin supply, reportedly created by Binance for Trump-backed World Liberty Financial, remains in Binance wallets, potentially generating tens of millions of dollars in annual interest.
Is the Trump-Binance stablecoin connection a conflict of interest?
Critics say the relationship between Binance and World Liberty Financial could present a conflict of interest for President Trump, especially as he seeks to expand his crypto ventures while holding the nation’s highest office. Trump, who once called Bitcoin a scam, has since embraced digital assets, with crypto-related projects reportedly adding over $620 million to his fortune recently.
The allegations have also sparked concerns about a possible “pardon exchange.” CZ, who pleaded guilty to anti-money-laundering violations in 2023 and served four months in prison, publicly admitted to applying for a presidential pardon from Trump. Some observers worry that financial ties between the two could influence the outcome.
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CZ calls Bloomberg’s report on Trump stablecoin ‘FUD’
CZ’s response was swift and forceful. He refuted any misconduct, asserting that the Bloomberg article was rife with errors and driven by rivals. Binance’s spokesperson maintained that USD1 followed the exchange’s standard listing process and that Zhao’s pardon application was a personal matter, unrelated to the company’s operations.
World Liberty Financial also denied the allegations, calling them factually deficient and politically motivated. The Trump administration insists there are no conflicts of interest, citing a trust arrangement for the president’s business holdings overseen by Donald Trump Jr.
Allegations raise questions about political influence in crypto
The timing of the Bloomberg report is significant. Congress is currently debating the GENIUS Act, a bill to regulate payment stablecoins in the US. Trump has signaled his support for the legislation, which has already passed the Senate and is awaiting a House vote.
The relationship between Binance, Trump, and the USD1 stablecoin remains under intense scrutiny. Lawmakers, ethics experts, and the crypto community are watching closely for signs of undue political or financial influence.
With legal threats flying and billions at stake, the Binance-Trump stablecoin saga is far from over. The outcome could reshape the landscape of crypto regulation and political power in the United States.
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