Changpeng “CZ” Zhao, the former CEO of Binance, has denied claims that he agreed to testify against TRON founder Justin Sun as part of his plea deal with the U.S. Department of Justice. The allegations were first reported by the Wall Street Journal, which suggested that Zhao’s cooperation with federal authorities could implicate Sun in future legal proceedings.
Zhao responded to the report on X , stating,
“WSJ is really TRYING here. They seem to have forgotten who went to prison and who didn’t,” implying that those who fully cooperate with the government typically avoid incarceration.
Zhao served a four-month sentence after pleading guilty in 2023 to violations of anti-money laundering laws—despite prosecutors originally seeking a 36-month term.
Justin Sun also addressed the allegations, expressing surprise at the report and reaffirming his strong personal relationship with Zhao. He referred to Zhao as both a mentor and a close friend, denying any indication that Zhao had cooperated against him.
Context: Binance’s Legal Fallout
The rumors come amid broader scrutiny of Binance’s legal entanglements. In November 2023, Zhao and Binance pleaded guilty to operating an unlicensed money-transmitting business and violating the Bank Secrecy Act. The plea deal required Binance to pay more than $4.3 billion in penalties, while Zhao agreed to a $50 million fine and stepped down as CEO.
As part of the agreement, Binance was also required to appoint two independent monitors—one by the Department of Justice (DOJ) and another by the Financial Crimes Enforcement Network (FinCEN)—to oversee its compliance program for the next several years.
WSJ: More Claims Around Binance Oversight and Stablecoin Listing
The Wall Street Journal further reported that Binance executives met recently with Treasury Department officials to petition for the removal of one of those monitorships. Specifically, the company is seeking to end the five-year oversight assigned to Sullivan & Cromwell partner Sharon Cohen Levin, which was mandated by FinCEN. Binance’s separate three-year monitorship by Forensic Risk Alliance (FRA), appointed by the DOJ, remains in place.
In addition, the Journal claims Binance is in talks to list a stablecoin developed by World Liberty Financial, a project aligned with the Trump administration’s pro-crypto stance. The new asset, USD1, is described as a fully-backed stablecoin, modeled after regulated offerings like USDC and USDT, and anchored by U.S. Treasuries and other liquid reserves.
The report also reiterated previous claims that Zhao may be seeking a presidential pardon. While he did not confirm that intention, CZ cryptically noted on X:
“No felon would mind a pardon, especially being the only one in U.S. history who was ever sentenced to prison for a single BSA charge.”
Quick Facts
- Changpeng Zhao denies WSJ claims that he agreed to testify against Justin Sun as part of his plea deal.
- Justin Sun expressed surprise and emphasized his strong relationship with Zhao.
- Binance and CZ pleaded guilty in 2023 to U.S. federal violations related to anti-money laundering laws.
- Binance is reportedly trying to end one of its two federal monitorships and is considering listing a Trump-endorsed stablecoin called USD1.
