Justin Sun vs CZ Drama Continues! Are There Any New Evidence of Plea Deal?

The tension between Binance founder Changpeng “CZ” Zhao and TRON founder Justin Sun has returned to center stage following explosive new claims published by the Wall Street Journal (WSJ). 

According to the report, CZ allegedly provided evidence against Justin Sun as part of a plea deal with the U.S. Department of Justice (DOJ)—a claim that has reignited speculation about the pair’s legal standing and personal relationship.

But are these allegations backed by credible evidence? Or is this yet another sensationalist wave of media-driven narrative surrounding two of crypto’s most recognized figures?

WSJ Alleges CZ Turned on Justin Sun

The Wall Street Journal's latest report suggests that CZ cooperated with U.S. authorities by providing evidence against Justin Sun as part of his plea deal. The report comes months after CZ pleaded guilty to violating the Bank Secrecy Act (BSA), for which he served a four-month prison sentence—far less than the three years initially sought by prosecutors.

The allegations, if true, could indicate a deeper rift in crypto’s inner circle. However, CZ has responded publicly, strongly denying the claims.

“WSJ is really TRYING here,” CZ posted on X (formerly Twitter), adding: “People who become gov witnesses don't go to prison. They are protected... I heard someone paid WSJ employees to smear me.”

In contrast, the WSJ article also ties the timing of this alleged testimony to Binance’s current efforts to scale back Treasury Department oversight, adding political undertones to an already charged narrative.

Read Also: US Crypto Regulation Confimed! Will the Market be Bullish in August?

Justin Sun Responds: “CZ is My Mentor and Friend”

Despite the WSJ's accusations, Justin Sun has downplayed the report, reiterating his strong bond with CZ.

“CZ is my mentor and a close friend,” Sun stated, while reaffirming TRON’s collaboration with the DOJ's T3 Financial Crime Unit—a public-private partnership also involving Tether and TRM Labs. The initiative aims to combat illicit transactions using the USDT stablecoin on TRON’s blockchain.

Sun’s diplomatic tone suggests that, at least on the surface, there is no animosity between the two crypto heavyweights.

Plea Deals and Prison Time: Did CZ Receive Special Treatment?

CZ’s light sentencing raised eyebrows across the crypto space. Legal experts and community commentators noted the unusual outcome of the plea deal:

“While the DOJ just didn’t have enough goods on CZ to warrant three years, I can’t believe he’s getting just four months,” said Terrence Yang, Managing Director at Swan Bitcoin.

Notably, CZ’s claim that witnesses “don’t go to prison” isn’t entirely accurate. For example, Caroline Ellison, former CEO of Alameda Research, faced up to 110 years in prison but received only two years after testifying against FTX founder Sam Bankman-Fried, who is now serving a 25-year sentence.

So, the idea that cooperating witnesses are immune from incarceration is debatable—and CZ’s prison time doesn’t necessarily contradict the idea that he could have collaborated with the DOJ in some form.

Binance’s Battle With Oversight & USD1 Stablecoin Listing

Adding another layer to this unfolding drama, the WSJ also claims Binance executives met with U.S. Treasury officials in March 2025, lobbying to reduce oversight—particularly to lift the 5-year monitorship placed by FinCEN (Financial Crimes Enforcement Network).

Two monitors were appointed after Binance’s 2023 settlement with the DOJ:

• 3-year DOJ monitorship (handled by FRA)
• 5-year FinCEN monitorship (led by Sharon Cohen Levin)

Binance reportedly hopes the Trump administration will support reducing regulatory scrutiny.

Furthermore, the WSJ revealed that Binance is considering listing USD1, a new stablecoin launched by World Liberty Financial—a Trump-associated crypto project. USD1 is claimed to be 100% backed by U.S. Treasury assets, USD deposits, and other cash equivalents.

This potential listing raises eyebrows, especially when viewed alongside the lobbying efforts—suggesting Binance may be aligning with political powers to regain operational leeway in the U.S.

Read Also: World Liberty Financial (WLFI) Proposes USD1 Stablecoin Airdrop

Is CZ Seeking a Trump Pardon?

One of the more sensational claims involves whether CZ is quietly seeking a pardon from President Trump, a possibility also reported by the WSJ. CZ didn’t directly deny this, instead cryptically posting:

“No felon would mind a pardon, especially being the only one in U.S. history who was ever sentenced to prison for a single BSA charge.”

Given Trump’s history of pardoning crypto figures like Ross Ulbricht (Silk Road) and Arthur Hayes (BitMEX), a CZ pardon isn’t entirely off the table—especially if Binance plays its cards right with U.S. political interests.

Market Reaction & Legal Context

Despite the drama, Binance’s native token BNB rose around 1% in the 24 hours following the report. This mild uptick indicates that the market isn’t panicking—at least not yet.

Meanwhile, Binance and the WSJ authors have not publicly commented on the article’s claims, and Binance’s separate SEC case remains ongoing, with a joint request recently filed for a 60-day pause.

Read Also: Exposing Trump’s Market Manipulation and Its Impact on the Crypto Market

Conclusion

The CZ vs Justin Sun drama appears far from over, with major questions surrounding alleged DOJ collaboration, Binance's regulatory future, and political influence. 

While both leaders have publicly dismissed the claims, the crypto community remains divided—uncertain whether this is an orchestrated smear, or just the tip of a deeper iceberg.

As always in crypto, narratives can change rapidly, and only time will reveal whether this controversy was overblown or truly the beginning of a historic legal pivot.

FAQ

What is the recent controversy involving CZ and Justin Sun?

The Wall Street Journal (WSJ) reported that Changpeng "CZ" Zhao, founder of Binance, allegedly provided evidence to U.S. prosecutors against Justin Sun, founder of TRON, as part of his plea deal. This has stirred public speculation and debate within the crypto community.

Did CZ confirm he provided evidence against Justin Sun?

No. CZ strongly denied the allegation. He posted on X (formerly Twitter), claiming that the WSJ report was part of a possible smear campaign and asserted that government witnesses typically don’t go to prison — implying his four-month sentence disproves the claim.

How did Justin Sun respond to the allegations?

Justin Sun also downplayed the report, referring to CZ as his “mentor and close friend.” He emphasized his strong relationship with the U.S. Department of Justice (DOJ), particularly through the T3 Financial Crime Unit, a collaboration between TRON, Tether, and TRM Labs.