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Wall Street Journal Embroiled in Defamation Suit Over Tether and Bitfinex Reporting

ByDayne Lee

Mar 5, 2024
Wall Street Journal Embroiled in Defamation Suit Over Tether and Bitfinex Reporting

Wall Street Journal Embroiled in Defamation Suit Over Tether and Bitfinex Reporting

The Wall Street Journal, one of the leading financial publications, is currently embroiled in a legal battle following a defamation lawsuit stemming from its coverage of alleged illicit activities linked to prominent crypto firms Tether and Bitfinex. Christopher Harborne, a shareholder of Tether and his company AML Global Ltd, initiated the lawsuit in Delaware Superior Court on February 28, targeting Dow Jones & Company, the Journal’s overseeing corporation.

The Basis of the Lawsuit

Christopher Harborne, who owns nearly 13% of Tether through his engagement in Bitfinex’s compensation strategy after a 2016 security breach, has taken legal action against the Journal. Despite his significant investment, Harborne asserts he holds no executive role within the company. The lawsuit centers on accusations made by the Wall Street Journal in a February 2023 article, which Harborne claims falsely implicated him and AML Global Ltd in severe criminal activities, including fraud, money laundering, and financing of terrorism. Harborne and his legal team argue that the Journal’s staff had access to documents unequivocally disproving the allegations, yet chose to publish them.

The contentious article detailed the struggles faced by Bitfinex in maintaining access to the global banking system during the latter part of 2018, alleging reliance on questionable intermediaries and practices to sustain operations. Harborne was specifically highlighted as a central figure in these operations, a portrayal he vehemently disputes.

Article Revisions and Company Responses

Following the publication, the disputed content regarding Harborne and AML Global was removed on February 21, 2024, with the Wall Street Journal appending an editor’s note to the article. This revision comes after Tether’s Paolo Ardoino dismissed the original piece as a “clown article,” asserting that it would inadvertently fuel the company’s expansion. Indeed, Tether experienced substantial growth in 2023, with its stablecoin, USDT, witnessing a market value increase of over $20 billion amidst a tumultuous period for competitors concerned with the stability of the U.S. financial system.

Tether’s Financial Triumphs

Amid the controversy, Tether reported a remarkable net profit of $2.85 billion for the fourth quarter of 2023. This financial success was attributed largely to the passive income generated from U.S. Treasury securities, underscoring the firm’s robust reserve backing and operational resilience.

Key Facts of the Lawsuit and Article Impact

PlaintiffChristopher Harborne and AML Global Ltd
DefendantDow Jones & Company, Inc.
Lawsuit FiledFebruary 28, 2024
AllegationsFraud, money laundering, and financing terrorism
Article PublicationFebruary 2023
Content Removal and Editor’s NoteFebruary 21, 2024
Tether’s Market Value Growth in 2023Over $20 billion
Tether’s Q4 2023 Net Profit$2.85 billion

Reflecting on the Defamation Case

This lawsuit against the Wall Street Journal by a key figure in the cryptocurrency space highlights the delicate balance media outlets must navigate between investigative journalism and the potential for defamation. The case raises important questions about the responsibility of news organizations to verify their reporting, especially when dealing with complex and evolving industries like cryptocurrency. As the legal proceedings unfold, the crypto community and media watchers alike will be keen to see how this case impacts the relationship between journalism and the subjects of its scrutiny.

The outcome may set precedents for how allegations of illegal activities are reported in the crypto sector and could influence future journalistic practices. Meanwhile, Tether’s financial achievements amidst this turmoil underscore the resilient nature of the cryptocurrency market, even in the face of significant regulatory and media scrutiny.

Featured image credit: fox17 via Adobe Stock

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.