Binance Is Suing a Newspaper in the One Place It Probably Shouldn’t

New York has 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.

Binance Takes the Wall Street Journal to Court

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. 

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.

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.

“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.” 

On top of that, New York is one of the least forgiving jurisdictions in the country for this kind of legal action.

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.

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. 

“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. 

She also noted that the exchange’s lawsuit against the WSJ isn’t the first time Binance has used SLAPP tactics.

“[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.”

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.

Yet, given that that’s not the case in New York, if the case does go forward, it could be bad news for Binance.

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.

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. 

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. 

“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.

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.

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. 

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.

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.

From that lens, the lawsuit is less a legal maneuver and more a public signal.

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.”

By filing in the toughest possible jurisdiction, Binance may be signaling that it welcomes scrutiny and has nothing to hide.

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.