- Binance has filed a lawsuit against Forbes and two of its journalists
- Forbes claimed that Binance was actively seeking ways to sidestep U.S. regulations
- Binance has argued that the allegations are “false, misleading and defamatory”
Binance has filed a lawsuit against Forbes and two of its journalists over the outlet’s allegations that the exchange was seeking to sidestep U.S. regulations. Binance claims in the filing that the Forbes story “contains numerous false, misleading and defamatory statements about Binance” which has “seriously damaged” the exchange, costing them “millions of dollars in the process”. Forbes claimed to have seen a presentation made by a Binance executive which outlined how they could hoodwink U.S. regulators into bypassing regulations, including sidestepping AML/KYC regulations.
Binance Planned to Teach Users How to “Evade Geographic Restrictions”
The article in question accused Binance executives of creating an “elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States”. The article cited a document seen by Forbes which claimed to reveal the real purpose behind Binance’s creation of Binance U.S.:
While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance. All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.
Binance has rebutted these claims, calling them, and many others, “false,
misleading and defamatory”, arguing that Forbes was aware they were false and that they proceeded anyway, knowing they would damage the company.
The lawsuit also claims that no one at Binance created such a plan, and that the individual associated with doing so, Harry Zhou, “is not and never was an employee of Binance.”
CZ Sees Crypto Community Turn Against Him
It’s never a good look when companies take reporters to court, and in this case it is even more bizarre seeing as the story barely caused a ruffle when it came out, to the point where many people are reading about it for the first time because of the Binance lawsuit.
Forbes has stuck by the story, and it seems that the cryptocurrency community has picked their side, with many siding with Forbes over the Binance CEO:
You can and should refute the story if you feel misrepresented. But let your actions speak for themselves. You won’t win many friends going after journalists in the US. Makes you look revengeful and petty. Bad stories can happen. Get over it.
— Impermanent Capital (@ledgerstatus) November 18, 2020
The move from Binance, and the reaction that it has garnered, illustrates once more just how much Binance’s star has waned in the past couple of years.