Cryptocurrency exchange Binance has dropped its libel lawsuit against the news outlet Forbes and two of its journalists, and it did so without loud announcements. Recall that Binance Holdings filed a lawsuit against Forbes along with journalists Michael Del Castillo and Jason Brett in November 2020.
This happened after the release of an article, which claimed that Binance deliberately sought to divert the attention of US financial regulators from the supposedly real problems of the trading platform and continued to serve local residents. Let’s understand the situation in more detail.
Recall that the relationship with some journalists from the management of the Binance exchange is not the best. In particular, the founder of the exchange, Changpeng Zhao, does not get along with the staff of The Block, which in November 2019 spoke about the «closure of the Binance office in Shanghai after the police raid.»
The platform said that there is no company office in this city, so the news is fiction.
Binance case overturned in court
A voluntary waiver notice was filed with the US District Court in New Jersey on February 4, 2021, ending the legal proceedings against Forbes. The document does not contain an explanation of the reasons for the withdrawal of the claim. It simply states that Binance: «hereby gives notice of its voluntary waiver without prejudice to the above action against the Forbes Media LLC defendants, Michael del Castillo and Jason Brett.»
The controversial Forbes investigation was based on a document allegedly published by a former Binance employee. It detailed the firm’s strategy to undermine US regulatory rules by continuing to serve American clients, allegedly despite all prohibitions. Binance has allegedly developed a wide variety of strategies to evade regulatory control. These included proactively joining self-regulatory organizations and using virtual private networks (VPNs) to avoid regulatory oversight.
That is, in fact, the source confirmed the information that the cryptocurrency platform allegedly continued to provide trading opportunities for US residents. At the same time, it was forbidden to do so.
Binance Holdings said the Forbes article caused the company millions of dollars in material damage. Moreover, all the information contained in it is «slander» and does not in any way border on the real state of affairs. A Binance spokesman told Cointelegraph that even after the lawsuit was canceled, the exchange’s management’s opinion on the current state of affairs will not change. Here is a quote.
Binance still firmly believes that the Forbes article dated October 29, 2020 is false and misleading. As the company stated in its complaint against Forbes, Binance is committed to complying with all applicable laws and regulations, and Forbes claims to the contrary are unfounded. However, in the interests of providing the best possible service to its users – especially at this time of unprecedented growth in cryptocurrencies – the company is not currently in litigation.
Note that noticeable problems have been observed in the work of the exchange lately. In particular, the platform regularly goes offline and trading is suspended. This situation became especially noticeable at the beginning of the week, when Bitcoin set another all-time high due to the news about the purchase of BTC by Tesla.
At the same time, it is quite simple to explain this feature of the behavior of cryptocurrency platforms. The fact is that the management of the exchanges provide the minimum performance of the platforms for work at the moment, since it is unprofitable to increase the costs of servers for the sake of a possible increase in the load on the platforms. And when a spike in activity happens, sites fail to keep up with the influx of users. Read more about the situation in a separate article.
Meanwhile, the price of the native Binance Coin token has surpassed the historic level of $ 100 and set a record of $ 147. It seems that any losses – if they were caused by journalists – were more than covered against the background of this stage of growth. The exchange now simply does not want to bother with a lawsuit, since even if it wins, it will not receive a relatively high profit.
We believe that the situation turned out to be rather strange. Yet Binance’s management vigorously denied any deviations from the legal framework and promised to ensure that justice is done. However, now representatives of the company easily refuse all claims and explain this by the stage of growth of the cryptocurrency market. The lawsuit may not really bring a lot of money to the exchange – especially in comparison with the platform’s profitability due to the increased activity of traders – but here it obviously should not be about the money.
Be that as it may, a few months later the claim was withdrawn. This means that the arguments of Forbes representatives no longer seem so groundless – at least in theory.