Crypto Market Stirs with Controversy: Binance, USD1, and Coinbase
In a week marked by high drama, the cryptocurrency sector was abuzz with rumors and stories that rippled through the community. At the center of this whirlwind is a story from Bloomberg that ties Binance to the creation of a new stablecoin, USD1, which is backed by World Liberty Financial and allegedly has connections to the family of former U.S. President Donald Trump. In response, Coinbase’s principal legal officer stepped in to refute claims that the firm had any part in the report.
Coinbase Firmly Denies Involvement in Bloomberg Report
Paul Grewal, the chief legal officer of Coinbase, took to social media to explicitly deny any involvement in the Bloomberg article. He publicly stated that Coinbase had “absolutely no role” in the creation of the story. Grewal further emphasized that his team does not engage in undermining competitors, urging those interested to continue their search for the original source of the rumor. This misinformation, he reiterated, is completely unfounded. Coinbase remains committed to its stance of not engaging in competitive sabotage and instead focuses on expanding the cryptocurrency ecosystem.
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“Sorry—this is pure misinformation. We absolutely did not contribute to this story. We don’t attack competitors, and we welcome any businesses that share our goal of growing the crypto pie. You should keep looking for an actual source.” — paulgrewal.eth (@iampaulgrewal) July 13, 2025
Recently launched, USD1 has quickly amassed $2.20 billion in circulation. A substantial portion, approximately $2 billion, is held by Binance, who invested in a UAE sovereign fund. Bloomberg’s report suggested that Binance was responsible for coding the smart contract for USD1, a claim tied to the speculation about founder Changpeng Zhao’s ambitions for a presidential pardon.
Conflicting Allegations and Underlying Motives
The situation took another turn when crypto analyst Matt Wallace speculated on social media that Coinbase might have been the unnamed informant behind the negative story targeting President Trump’s World Liberty Financial and Binance. Wallace hinted that a presidential pardon for Zhao could potentially restore Binance’s competitive edge in the U.S., posing a significant threat to Coinbase’s market position.
“🚨JUST IN: Evidence is emerging that COINBASE was the ‘anonymous’ source behind the hit job on President Trump’s World Liberty Financial and Binance ‼️ Coinbase learned that a pardon for Binance’s CZ may be on the table and due to their industry high fees and poor customer…” — Matt Wallace (@MattWallace888) July 13, 2025
This speculation has sparked widespread interest, garnering over a million views. Zhao’s retweet of the claims added fuel to the conversation, though he did not explicitly endorse the accusations.
Legal Repercussions and Future Directions
In response to the unfolding drama, Binance’s founder Changpeng Zhao refuted Bloomberg’s report, labeling it as a “hit piece” potentially orchestrated by a competitor. He recalled his previous legal victory against Bloomberg in 2022, which resulted in the media outlet issuing an apology after publishing false claims. Zhao is now contemplating another defamation lawsuit.
As the crypto community awaits further developments, the true source of the Bloomberg story remains unknown. Coinbase denies any involvement, while Binance suggests adversaries are at play. The situation remains fluid, with the possibility that regulators might intervene should the allegations of stablecoin manipulation prove substantial. Until then, Coinbase and Binance continue to stand by their respective narratives.
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