This week, the crypto community was abuzz with sensational accounts suggesting a potential scandal involving Binance and its ties to the newly launched USD1 stablecoin. A recent Bloomberg article accused the exchange of being involved in the development of USD1, which is reportedly backed by World Liberty Financial and has connections to Donald Trump’s family. In the midst of the uproar, Coinbase’s legal chief took to social media to clarify his company’s position, denying any involvement in the controversial report.

Coinbase’s Clear Denial of Involvement

Paul Grewal, the chief legal officer of Coinbase, asserted unequivocally that Coinbase played no part in the narrative that made headlines. He stated in a post on X that the firm “absolutely did not contribute to this story,” expressing his annoyance about the implications of their supposed involvement.

He encouraged anyone seeking the truth to investigate further, emphasizing that this entire situation was “pure misinformation.” Grewal also reiterated Coinbase’s commitment to fostering a healthy competitive market without resorting to discrediting competitors.

To clarify: this is pure misinformation. We absolutely did not contribute to this story.

We value all businesses dedicated to expanding crypto’s influence—no need for attacks.

Keep digging for the real source.

— paulgrewal.eth (@iampaulgrewal) July 13, 2025

The USD1 stablecoin was introduced by World Liberty Financial just weeks ago, boasting a circulation of approximately $2.20 billion. Binance has reportedly acquired around $2 billion of these coins in a maneuver aligned with its investments in the UAE market.

Bloomberg’s report suggested that Binance played a significant role in creating the smart contract for USD1. Some speculate this could be tied to Changpeng Zhao’s aspirations regarding a potential presidential pardon.

Competing Narratives Heat Up

The discourse escalated when crypto analyst Matt Wallace insinuated that Coinbase might have been the unnamed informant fueling the Bloomberg narrative. He emphasized that a pardon for Zhao could enable Binance to regain its footing in the U.S. market, posing a competitive threat to Coinbase’s position.

BREAKING: Information suggests COINBASE was behind the recent smear against President Trump’s World Liberty Financial and Binance!

Coinbase is concerned about Zhao potentially receiving a pardon, especially considering their high transaction fees and customer service issues…

— Matt Wallace (@MattWallace888) July 13, 2025

Wallace pointed out that factors like lower fees and a broader international presence could shape the competitive landscape. Though his assertions lacked solid evidence, they attracted significant attention, accumulating over 1 million views on X. Zhao further fueled the fire by sharing the allegation, enhancing the conversation around it despite not explicitly endorsing it.

Legal Challenges and Future Developments

In response to the situation, Changpeng Zhao took a firm stance against the Bloomberg article, labeling it as a “hit piece” and insinuating that financial motives from competitors could be behind it. He recalled a precedent when he filed a lawsuit against Bloomberg in 2022, resulting in retractions from the media outlet. Now, he is contemplating further legal action for defamation.

The mystery surrounding the original source of the Bloomberg article continues, as Coinbase adamantly distanced itself from the claims, while Binance maintains its narrative of external animosity. The absence of clarity leaves the public seeking answers, while regulatory bodies might step in if any allegations point to falsehoods or market manipulation. For the time being, both companies stand firm in their respective accounts.

Featured image courtesy of HollaEx, chart data from TradingView