Bloomberg’s subsidiary in Hong Kong accused Changpeng Zhao (CZ) – Chief Executive Officer of Binance – of running a cryptocurrency Ponzi scheme. In turn, the exec filed a lawsuit against the media.
Not long ago, Modern Media Company Limited (an entity that manages content for Bloomberg in Hong Kong) titled one of its articles: “Can Crypto’s Richest Man Stand the Cold?” What caused the controversy is how Bloomberg Businessweek decided to rename the column: “Zhao Changpeng’s Ponzi Scheme.”
It claimed that Binance had laundered billions of dollars and had connections to the Dark Web and North Korean hacking groups. Modern Media’s biggest accusation was that CZ stands on top of an investment fraud that lures clients into distributing their wealth on promises of large profits.
Unsurprisingly, Zhao disagreed with the article. According to a recent filing, he even sued Bloomberg’s Hong Kong affiliate for defamation. While saying that most company journalists are unbiased and report all stories correctly, there is a small percentage of unprofessional individuals that could ruin one’s reputation, he added.
In addition, CZ’s legal counsel alleged that the original English-language version of the article also contained defamatory accusations. The attorneys argued that the statements were “completely unsubstantiated, and were obviously designed to mislead readers into believing that Zhao and Binance have been engaging in illegal or unsavory activities.”
In 2020, another media giant – Forbes – published an article classifying Binance’s operations as illegal. Specifically, it blamed the platform for facilitating money laundering procedures and deceiving financial regulators. For its part, the exchange sued Forbes, asserting that all such statements are false and highly defamatory.
Interestingly, the following year Binance dropped its lawsuit against the media company without giving a reason for its decision.
Earlier this year, the two firms seemed to have buried the hatchet since the trading venue invested $200 million in Forbes. The initiative aims to help the magazine merge with a publicly-traded special purpose acquisition company (SPAC) later in 2022.