Changpeng Zhao, or CZ, the founder of Binance, has threatened to sue Bloomberg for the second time over a report linking the exchange to the USD1 stablecoin.
In a post on X on Friday, CZ called the article 'another attack' funded by 'a competitor,' but did not specify the competitor's name. He dismissed it and suggested that this was an article aimed at spreading fear, uncertainty, and doubt, often referred to in cryptocurrency terms as FUD.
CZ stated that Bloomberg's report had 'so many factual errors that I don't even know where to begin,' adding:
"We might have to sue them again for defamation."
Controversial Bloomberg Report
The focus of CZ's legal threat is a Bloomberg report published on Friday. Citing three anonymous sources, the report accused Binance of developing the underlying smart contract code supporting the stablecoin USD1.
World Liberty Financial, a cryptocurrency company linked to U.S. President Donald Trump and his sons, launched USD1 on May 22. On the same day, The Wall Street Journal published an article accusing CZ of acting as a 'fixer,' introducing the World Liberty Financial team to international officials. CZ denied the allegations in the article.
The launch of USD1 comes nearly a month after the founders of World Liberty Financial met with CZ amid efforts to promote the adoption of this currency globally. Shortly thereafter, a company based in Abu Dhabi invested $2 billion in Binance, paid in USD1. Bloomberg's report also claimed that nearly 90% of the total USD1 remains in Binance wallets, potentially generating tens of millions of dollars in interest for the Trump family.
Shortly after the Binance deal involving USD1, CZ sought a pardon from Trump. CZ had been convicted and released after four months in prison last year for failing to maintain adequate safeguards on Binance to prevent money laundering.
Bloomberg's article suggested that CZ's expectation of a pardon in the context of Binance's close relationship with World Liberty Financial raises questions about conflicts of interest.
Notably, the cryptocurrency community largely supports CZ, as most users urge him to continue the defamation lawsuit against Bloomberg.
CZ's Lawsuits Against Bloomberg and Other Media Outlets
CZ has repeatedly sued media outlets. He sued Modern Media, a Bloomberg publisher in Hong Kong, for a magazine article on July 6, 2022, accusing CZ of running a Ponzi scheme. It should be noted that Bloomberg itself is not a party in the lawsuit.
In July last year, Modern Media issued an apology to CZ and Binance after losing a lawsuit in a two-year legal battle. The news agency retracted an article titled 'Changpeng Zhao's Ponzi Scheme,' calling the title 'false and unfounded.' At that time, Modern Media agreed to donate an agreed-upon amount instead of paying damages.
Before the 2022 lawsuit, CZ also sued Forbes in 2020 over a report that alleged Binance facilitated money laundering and deceived financial regulators. However, CZ withdrew the lawsuit in 2021. In 2022, Binance invested $200 million in Forbes.
CZ has also previously denied allegations from other media outlets. In April, CZ dismissed a Wall Street Journal article that accused him of agreeing to testify against Tron founder Justin Sun as part of a smear campaign.