Binance Sues WSJ in New York: A Legal Farce?

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New York, that paragon of legal sophistication, boasts some of the most robust press protection laws in the country. These give defendants like the Wall Street Journal (WSJ) the right to challenge a lawsuit early and get it thrown out before it becomes costly and drawn out.

Though the move may seem counterintuitive, it could be entirely deliberate. Binance may be signalling that it welcomes scrutiny and has nothing to hide. The move appears designed to send a clear message to those who hold assets on its platform that the exchange will fight back even at the risk of what a full legal proceeding might expose. A champagne socialist, perhaps?

Binance’s Dramatic Duel with the Wall Street Journal

In February, the WSJ published an investigation claiming that Binance dismissed employees who had raised concerns about more than one billion in crypto transactions linked to sanctions against Iranian actors. How very un-American, one might say.

Two weeks later, Binance filed a defamation lawsuit against Dow Jones & Company, the publisher of the WSJ, in the Southern District of New York. The exchange claimed the newspaper had published at least 11 false statements in its February report. One wonders if the WSJ’s editor-in-chief is now drafting a response in iambic pentameter.

The lawsuit was surprising. In general, defamation lawsuits are extremely difficult to prove. Given that this case involves a public figure like Binance and a respected newspaper like the WSJ, there’s a heightened standard of actual malice. A standard so high, it might as well be a unicorn.

“For defamation to be shown, it can’t just be that parts of the story were false,” said Khurram Dara, an attorney and former policy advisor at Bain Capital Crypto and Coinbase, in a recent BeInCrypto podcast. “[The WSJ] had to have known at the time of publication that there was false information, or they would have had to have reckless disregard for the truth or falsity of the statement.” A delightful tangle of legalese, if ever there was one.

On top of that, New York is one of the least forgiving jurisdictions in the country for this kind of legal action. A place where even the air is thick with lawsuits and the scent of desperation.

Why New York Was a Surprising Choice

New York State has one of the strongest legal provisions against SLAPP laws in the country. The acronym, which stands for Strategic Lawsuit Against Public Participation, describes a situation in which a powerful entity files a lawsuit not because they genuinely expect to win in court, but because the lawsuit itself is the weapon. A theatrical performance, if you will.

The goal is to exhaust the other side financially and emotionally until they back down. Anti-SLAPP laws were created specifically as a shield against this tactic. They give defendants, like the WSJ, the right to argue whether a lawsuit of that nature is frivolous. If the paper succeeds in such a scenario, Binance would have to cover all of the legal fees. A noble cause, if ever there was one.

“I think it’s really interesting that [Binance] picked New York. I would have picked someplace that didn’t have such robust anti-slap laws,” said Amanda Wick, Head of Americas at VerifyVASP, who previously spent over a decade as an attorney at the US Department of Justice. A sentiment as sharp as a lawyer’s pen.

She also noted that the exchange’s lawsuit against the WSJ isn’t the first time Binance has used SLAPP tactics. A pattern as predictable as a sunrise in a courtroom.

“[Binance] did tend to go after publications to try to silence them and to shut down unfavorable news stories,” Wick said, adding, “I’m not aware of any other crypto exchanges who have sued the press even when they had enforcement actions.” A rare breed, indeed.

Yikes. @binance is suing Forbes & 2 journalists for defamation over expose of alleged scheme to skirt regulation

Charles Harder on the brief-he’s best known for repping Thiel and Trump. So unclear if the case has merit or if it’s warning shot to other media

– Jeff Roberts (@jeffjohnroberts) November 18, 2020

In November 2020, Binance filed an almost identical defamation lawsuit against Forbes in New Jersey, only to voluntarily dismiss it three months later without ever going to trial. Notably, New Jersey had no press-protection laws at the time, making it a far more favorable jurisdiction for Binance than the one it chose later. A strategic move as baffling as a magician’s trick.

Yet, given that that’s not the case in New York, if the case does go forward, it could be bad news for Binance. A fate as inevitable as a courtroom verdict.

How Discovery Could Backfire on Binance

In the unlikely scenario that a judge allows the case against the WSJ to proceed, the lawsuit would enter the discovery phase. This stage would involve both parties handing over relevant documents, communications, and records. A dance of transparency, if you will.

For Binance, this would mean giving up internal compliance reports, emails between investigators and management, transaction records, and any communications that speak to what the exchange knew about the Iran-linked flows and when it knew it. A treasure trove of secrets, no doubt.

The risk is compounded by the fact that Binance is not operating as a normal company. As part of its 2023 criminal settlement, it agreed to operate under two independent government monitors whose job is to verify that the exchange is genuinely overhauling its compliance program. Two government-appointed snoopers, perhaps?

“If there’s evidence that… these investigators escalated this and they were ignored, or worse, if they were fired in response while there are two monitorships, that’s going to be really problematic,” Wick said. A scenario as dramatic as a Shakespearean tragedy.

Dara, who formerly ran as a Republican candidate for New York Attorney General, argued that winning in court may not be Binance’s primary objective in bringing the case. A noble goal, if ever there was one.

The Real Motive Behind the Lawsuit

Binance holds assets for over 300 million users. According to Dara, the reputational damage of a journalistic investigation could present an existential business risk to the exchange. A risk as high as a cliffhanger in a soap opera.

Unlike traditional finance, crypto operates around the clock across a global, natively online ecosystem where information travels at extraordinary speed and bad headlines can trigger platform flight almost instantly. A wild west of financial chaos, if you will.

He drew a direct parallel to the collapse of Silicon Valley Bank, where a single announcement about a capital shortfall spread through social media so rapidly that customers withdrew $42 billion in a single day. A financial earthquake, perhaps?

From that lens, the lawsuit is less a legal maneuver and more a public signal. A theatrical performance, if you will.

As Dara put it: “a bad headline in this space can be very damaging… it would be certainly very damaging for them to see a lot of flight from their platform.” A sentiment as sharp as a lawyer’s quill.

By filing in the toughest possible jurisdiction, Binance may be signaling that it welcomes scrutiny and has nothing to hide. A bold declaration, if ever there was one.

The move sends a clear message to those who hold assets on its platform that Binance will fight back even at the risk of what a full legal proceeding might expose. A David vs. Goliath tale, but with more paperwork.

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2026-04-20 01:47