Binance files defamation lawsuit against Wall Street Journal, demands jury trial

Binance is raising the temperature over a slew of negative reports on its compliance practices — even as more keep pouring in.

The crypto industry’s largest exchange filed a defamation lawsuit against The Wall Street Journal on Wednesday over the newspaper’s reporting in February that Binance fired employees after they uncovered $1.7 billion in crypto tied to sanctioned entities had flowed through the platform.

The lawsuit seen by DL News alleges that the Wall Street Journal planned its reports with “hatred” and “ill will,” and that the outlet rushed out a “clickbait” version of the story to beat competing news outlets.

Binance is pressing for a jury trial to decide the case.

Dow Jones, the Wall Street Journal’s parent company, did not immediately respond to comment.

In February, the Wall Street Journal and a host of other media outlets, including Fortune and The New York Times, published stories about how Binance fired compliance staff who flagged $1 billion in crypto was flowing through the exchange to sanctioned entities with ties to Iran.

Those entities allegedly included the Islamic Revolutionary Guard Corps and the Houthis.

A Binance spokesperson told DL News that the company had not filed similar lawsuits against Fortune or The New York Times. They declined to clarify why.

Binance has denied the version of events laid out in those reports.

Meanwhile, the Wall Street Journal reported on Wednesday that the Department of Justice is investigating Iran’s use of Binance to evade sanctions.

“We are not aware of any investigations,” a Binance spokesperson told DL News. “As always, we are collaborating with regulators and law enforcement to investigate the facts.”

Heart of the matter

Ongoing reports of sanctioned entities allegedly turning to Binance to move money cuts at the heart of the crypto exchange’s $4.3 billion settlement in 2023.

The company’s then-CEO, Changpeng Zhao, pleaded guilty to failing to implement adequate anti-money-laundering and anti-terrorist-financing safeguards on the exchange. As part of a plea deal, Zhao stepped down as CEO and spent four months in prison in 2024.

Binance also agreed to oversight from two independent monitors to review its compliance practices.

New reports this year, however, paint a picture of a company that continues to struggle to fend off sanctioned entities.

Citing reporting by the Wall Street Journal, Fortune and the New York Times, Connecticut Senator Richard Blumenthal, the ranking member of the Permanent Subcommittee on Investigations, slammed Binance in February.

“Binance is a repeat offender,” he said, formally opening a US Senate investigation into the company.

“It has long been aware that the Iranian regime and its terrorist proxies use its cryptocurrency platform as a convenient and reliable means to bypass international sanctions, anti-money laundering controls, and other banking restrictions.”

Binance’s legal team said the reporting that Blumenthal’s inquiry relies on is “demonstrably false” and “defamatory in several material respects.”

A ‘hollow offer‘

Wednesday’s lawsuit alleges that despite reporting, Binance’s compliance team was never dismantled.

Instead, after uncovering ties to sanctioned entities, Binance removed these users from the platform.

The company’s compliance personnel were fired, rather for breaching the company’s data protection and confidentiality policies, the company claims.

The crypto exchange also alleges that the outlet set an unreasonable deadline for its response to a detailed list of 27 questions. And when Binance responded, the company claims the reporters disregarded it.

“The Wall Street Journal‘s hollow offer to later correct or update the article with further comments or facts from Binance epitomises the Wall Street Journal’s ‘shoot first, ask questions later’ approach to the article,” the lawsuit reads.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at [e-mail].