Binance has filed a defamation lawsuit in the U.S. District Court for the Southern District of New York against Dow Jones, the publisher of The Wall Street Journal. The lawsuit follows a WSJ report suggesting the U.S. Department of Justice may be investigating whether Iran used the crypto platform to bypass sanctions.
On February 23rd, a Wall Street Journal (WSJ) investigative piece examined whether the U.S. Department of Justice (DOJ) is investigating Binance. According to the report, there are allegations that the exchange allows Iranian nationals to use cryptocurrency to circumvent U.S. economic sanctions and therefore violate them.
After the article was released, Binance said that “the article contained false and defamatory” information, adding that it did not violate U.S. sanctions. The crypto exchange also maintained that the article damaged the exchange’s reputation.
According to a complaint filed in court and posted on X by crypto reporter Eleanor Terrett, Binance said that The Wall Street Journal reported that the crypto exchange violated U.S. sanctions on Iran.
Binance maintained that the article contained inaccuracies and misstated facts concerning its compliance with regulations, as well as the results of its own internal investigations.
Source: X
Before the article was published, the crypto firm made efforts to correct errors in the article. But the newspaper declined to publish the corrections and ultimately published the article regardless.
Binance claimed that the article damaged its reputation and misrepresented how the exchange manages compliance. Therefore, the crypto firm is seeking compensation for damages and is asking the court to allow reimbursement of costs incurred defending itself in court. Additionally, it is requesting a trial by jury.
This represents an unusual example of a major cryptocurrency exchange taking legal action against a major media organization for reporting what the exchange believes to be false.
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According to the WSJ article, the investigation involves cryptocurrency transactions made through the crypto exchange.
These funds were later transferred to digital wallets associated with funding networks linked to Iran-backed militant organizations. This includes militant groups in Yemen such as the Houthis, according to sources familiar with the matter.
Additionally, the article stated that federal authorities have been interviewing people about their involvement in the alleged transactions to gather evidence.
It remains unclear whether the Department of Justice is investigating Binance for wrongdoing or if the focus is solely on users of the exchange that allegedly violated sanctions.
At the same time, the crypto platform has denied that it allowed direct transactions to occur with sanctioned entities. Binance wrote in a blog post that “there were no direct transactions between the exchange and any sanctioned entity.”
The exchange continued that during its internal compliance review, it identified a large, multinational financial network. The crypto firm stated that it cooperated with law enforcement to dismantle the network.
The crypto firm further stated that investigators concluded that only roughly $24 million had gone to the IRGC-related wallets via indirect paths rather than directly. The crypto exchange emphasized that it has one of the most robust compliance programs in the digital asset space and collaborates with global regulatory bodies regularly.
The case highlights rising tensions between crypto exchanges and mainstream financial media as regulators increase scrutiny of the digital asset industry.
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