On July 11, Bloomberg published an article alleging that Binance developed a technology framework for the stablecoin USD1, issued by World Liberty Financial (WLFI).
According to anonymous sources cited in the article, this move was part of an effort by Binance founder Changpeng Zhao (CZ) 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.
Crypto expert Matt Wallace asserted that Coinbase was the anonymous source for Bloomberg’s report. Wallace’s claim was later amplified when his tweet was reposted by the founder of Binance.
Wallace wrote, “Binance is the world’s #1 crypto exchange. A return to the U.S. would immediately cut into Coinbase’s market share and do severe damage to their bottom line.”
Coinbase’s general counsel, Paul Grewal, responded to these allegations and called Wallace’s claims “misinformation.”
“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,” Grewal stated.
In March, Bloomberg and The Wall Street Journal published articles claiming that Zhao was seeking a pardon amid discussions of business deals with the Trump family. Zhao refuted these reports. On July 11, he published a post calling the Bloomberg article “commissioned” and announced that he would be taking the matter to court.
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.
Additionally, Binance’s legal team released 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.
