CZ's Legal Battle Against Bloomberg: Binance, Trump, and the USD1 Stablecoin Controversy

By: Isha Das

The ongoing dispute between Binance founder Changpeng Zhao, known as CZ, and Bloomberg has taken another legal turn, as CZ threatens potential legal action over Bloomberg's recent report. The article accuses Binance of having connections to the Trump-backed USD1 stablecoin, claiming that Binance played a significant role in developing the code for the stablecoin and highlighting alleged conflicts of interest linked to World Liberty Financial, a firm with ties to former U.S. President Donald Trump and his family.

CZ has dismissed the report, calling it “another hit piece” aimed to spread fear and uncertainty, commonly known as FUD within the cryptocurrency community. According to the Bloomberg report, nearly 90% of all USD1 coins currently reside in Binance’s wallets, which could provide significant financial benefits to the Trump family. CZ has denied all allegations, emphasizing the factual inaccuracies in the report and signaling the possibility of a defamation lawsuit.

The introduction of USD1 into the market coincided with high-profile meetings and substantial financial maneuvers. On May 22, the launch of USD1 was followed by an Abu Dhabi-based company's $2 billion investment in Binance, executed in USD1, further fueling speculation on the extent of Binance's involvement. The controversy intensifies with claims from the report that CZ expected a pardon from Trump, a point CZ has rebuffed, citing previous media defamation cases against him, including suits against Forbes and Modern Media. Notably, CZ had previously filed and later dropped a suit against Forbes and secured an apology from Modern Media for defamatory reporting.

Adding another layer to the scenario, CZ recently retweeted an allegation suggesting that Coinbase was the anonymous source behind Bloomberg's report. A crypto commentator speculated that Coinbase executives might have been concerned about Binance potentially regaining market share in the U.S. if Zhao returns with full legal backing. These dynamic interactions within the crypto space emphasize intense competition and potential maneuverings by major exchanges like Coinbase and Binance. Despite these controversies, CZ continues to maintain a strong stance against what he perceives as false media depictions and portrays a significant backing within the crypto community, with many urging him to proceed with legal actions against Bloomberg.