A Bloomberg article raised questions about potential conflicts of interest between Binance and actions related to a pardon for Changpeng Zhao, sparking active discussions in the cryptocurrency market.
Allegations Against Binance and Changpeng Zhao
On July 11, Bloomberg published an article alleging that Binance developed a technological framework for the stablecoin USD1, issued by World Liberty Financial. According to anonymous sources, this move was part of Changpeng Zhao's efforts to seek a pardon from U.S. President Donald Trump. The sources claimed that such a pardon could allow Zhao to return to a leadership role at the exchange.
Coinbase's Response and Allegation Reactions
Crypto expert Matt Wallace claimed that Coinbase was the anonymous source for Bloomberg’s report and posted a tweet that was later retweeted by the founder of Binance. However, Coinbase's general counsel, Paul Grewal, refuted these allegations, calling Wallace’s claims 'misinformation'. He stated, 'We had nothing to do with that article. We do not attack competitors and welcome any companies that share our goal of developing the crypto market.'
Market Impact and Consequences for USD1
Following the publication of the Bloomberg article, trading volumes for USD1 briefly spiked on Binance, with some traders speculating that the news could impact the stablecoin’s future listings. Binance’s legal team issued a statement denying any involvement with World Liberty Financial beyond standard business relations and emphasized that no discussions regarding a presidential pardon had taken place. Meanwhile, Coinbase’s stock price experienced minor fluctuations amid the controversy, reflecting heightened market sensitivity to inter-exchange disputes.
The scandal surrounding Binance and allegations against Changpeng Zhao raise important questions about transparency and ethics in the crypto industry. Coinbase's reaction and market sensitivity show how serious the implications can be stemming from public discussions and accusations.
