Senator Warren Rejects CZ Defamation Threat, Citing DOJ on Money Laundering Plea

Senator Elizabeth Warren’s legal team has dismissed Binance founder Changpeng Zhao’s defamation threat, asserting her tweet about his guilty plea accurately reflects the Department of Justice’s (DOJ) description.

This dispute arose after Warren’s October 23 social media post following Zhao’s presidential pardon reignited debate about crypto regulation and the influence of politics in digital asset markets.

Legal Defense Rooted in DOJ Language

The official response, issued on November 2, 2025, insists that any lawsuit would face substantial legal challenges based on public records and constitutional protections.

Warren’s attorneys referred specifically to the DOJ’s November 21, 2023, press release in their response to Zhao. The DOJ statement defined the former Binance CEO’s charges as part of a “$4B resolution” for “anti-money laundering” violations.

CZ pleaded guilty in the US District Court for the Western District of Washington (Case No. CR23-179RAJ) for willfully failing to maintain an effective anti-money laundering program, a criminal offense under the Bank Secrecy Act.

The legal letter highlights that Warren’s tweet is both accurate and protected under the law. Her statement, that CZ “pleaded guilty to a criminal money laundering charge and was sentenced to prison,” closely mirrors the language used by federal prosecutors.

The DOJ described Binance’s violations as “anti-money laundering,” and the Bank Secrecy Act remains the key law for such offenses in the United States.

Legal specialists have commented that Zhao’s argument is narrow. One attorney noted that the distinction Zhao draws is weak.

“It was always the dumbest of technical arguments to suggest that failure to maintain a money laundering program wasn’t a money laundering charge,” said Max Schatzow in a post.

The response cites precedents involving public figures in defamation claims. Under New York Times v. Sullivan and Masson v. New Yorker, public figures must show “actual malice” that the defendant knowingly published false information or acted recklessly.

Warren’s statement, grounded in official documents and press releases, does not meet these requirements, her team argues.

Pardon and Political Controversy

The current dispute follows President Trump’s October 22, 2025, pardon of CZ. The legal letter highlights lobbying efforts and reported business connections between Binance and the Trump family ventures.

Warren introduced Senate Resolution 466 to condemn the pardon and underline the anti-money laundering violation; it was co-sponsored by 14 senators.

Zhao’s criminal actions spanned from August 2017 to October 2022, allegedly prioritising Binance’s growth over compliance. The company admitted to operating an unlicensed money transmitting business and to violating sanctions.

This resulted in one of the largest criminal resolutions involving a corporate executive, with CZ sentenced to prison before the pardon.

Warren’s reply highlights her role in financial oversight and dedication to transparency. The legal team cites broad news coverage from TradFi media, each of which describes CZ’s offence in language consistent with her tweet.

The letter clarifies the distinction between civil penalties and criminal charges, noting that CZ expressly admitted to criminal conduct under US law.

The letter also cites the wider regulatory framework. The Bank Secrecy Act requires financial firms and crypto exchanges to implement anti-money laundering programs. CZ’s failure constituted a criminal violation under sections 5318(h) and 5322(b)-(e) of the BSA, as well as other federal statutes.

High Bar for Defamation Claims

A legal source told Eleanor Terrett that Warren’s defense could make it very difficult to bring a defamation case. The source emphasized the alignment between Warren’s statement and the DOJ’s public characterization.

Because her statement relies on government language and court records, it will be a challenge for CZ to prove falsity or malice.

Warren’s lawyers also referenced constitutional safeguards for speech by senators. As a member of the Senate Banking Committee and a strong advocate for financial oversight, Warren has both the duty and the authority to inform the public about major enforcement actions. Both her tweet and her Senate resolution align with her legislative responsibilities.

As this standoff continues, the dispute highlights the ongoing tension between leaders in crypto and government regulators.

Whether CZ moves forward with a lawsuit remains unclear, but both legal and political consequences are significant.

The controversy also highlights the relationship between presidential pardons, corporate responsibility, and the duty of elected officials to ensure accountability within the industry.