Binance-Trump Stablecoin Report Sparks Coinbase Denial & CZ’s Legal Threat

Amidst heightened scrutiny of the cryptocurrency industry, a notable dispute has emerged concerning a Bloomberg report that links Binance, the world’s largest cryptocurrency exchange, to a stablecoin purportedly backed by the Trump family. Coinbase, a prominent U.S.-based exchange, has firmly denied allegations of being the anonymous source for this controversial story, which has ignited a public exchange between key figures in the crypto space and traditional media outlets.

• Coinbase’s Chief Legal Officer, Paul Grewal, publicly denied that Coinbase was the anonymous source for a Bloomberg report linking Binance to a Trump family-backed stablecoin.
• The Bloomberg report alleged Binance’s involvement in developing USD1, a stablecoin associated with World Liberty Financial and reportedly supported by the Trump family, with a circulating supply of approximately $2.20 billion.
• Crypto commentator Matt Wallace initially propagated claims on X, suggesting Coinbase sought to impede Binance’s U.S. resurgence, possibly linked to a presidential pardon for former Binance CEO Changpeng Zhao.
• Changpeng Zhao (CZ) labeled the Bloomberg story a “hit piece,” threatening legal action and referencing a prior successful lawsuit against the media company in 2022.
• The report suggested connections between USD1’s creation, Binance’s reported $2 billion investment in a UAE sovereign fund, and CZ’s alleged efforts to secure a presidential pardon.

Coinbase’s Firm Denial

Paul Grewal, Coinbase’s chief legal officer, publicly refuted claims that his exchange provided information for the Bloomberg article. In a statement on X, Grewal dismissed the accusation as misinformation, emphasizing that Coinbase does not engage in attacking competitors. He asserted that the exchange’s focus remains on expanding the overall crypto economy, rather than undermining other market participants. This denial aims to distance Coinbase from speculative narratives that could disrupt market dynamics and foster distrust within the industry.

Genesis of the Accusations

The allegations against Coinbase were initially propagated by crypto commentator Matt Wallace on X. Wallace suggested that Coinbase sought to impede Binance’s potential resurgence in the U.S. market. His theory posited that a presidential pardon for former Binance CEO Changpeng Zhao could empower Binance to reclaim significant market share, thereby affecting Coinbase’s standing due to Binance’s global reach and competitive fee structures. While Wallace provided no concrete evidence for these claims, the post gained significant traction, notably being retweeted by Zhao himself, leading to widespread speculation regarding its veracity despite Coinbase’s subsequent denial. This incident underscores the rapid dissemination of unverified information within the crypto community, often amplified by prominent figures.

The Bloomberg Report’s Allegations

The Bloomberg report at the center of this controversy alleged that Binance was instrumental in developing the smart contract for USD1, a recently launched stablecoin associated with World Liberty Financial, a crypto project reportedly supported by the Trump family. Furthermore, the article suggested a connection between the stablecoin’s creation, a reported $2 billion investment by Binance in a UAE sovereign fund, and Zhao’s alleged efforts to secure a presidential pardon from the current U.S. President, Donald Trump. The report also indicated that USD1 has a circulating supply of approximately $2.20 billion, with Binance holding a significant portion, estimated at $2 billion. These claims, if substantiated, would signify a complex interplay between political influence, stablecoin development, and international investment strategies within the cryptocurrency sector.

Changpeng Zhao’s Strong Rebuttal

In response to the Bloomberg publication, Changpeng Zhao critically labeled the story a “hit piece,” insinuating it was sponsored by a competitor. Zhao notably threatened to pursue legal action against Bloomberg for defamation, referencing a prior successful lawsuit against the media company in 2022 that resulted in a published apology. Zhao has historically expressed skepticism toward mainstream media, often accusing such outlets of disseminating inaccuracies about the cryptocurrency industry and himself. He had previously confirmed applying for a presidential pardon through standard procedures, clarifying that he had no direct contact or meetings with President Trump. This strong reaction highlights the ongoing tension between crypto industry leaders and traditional financial media, particularly when reports touch upon sensitive legal and political matters.