A federal judge heard arguments on whether Binance has grounds to sue over reports on Iran-linked flows. The Journal says the exchange's denials don't prove actual malice.
The Wall Street Journal asked a federal judge Wednesday to dismiss Binance's defamation lawsuit over three reports that portrayed the crypto exchange as weakening internal compliance and letting more than $1 billion in transactions flow to sanctioned Iranian entities.
Attorneys for the Journal argued Binance's March 2026 complaint did not show the newspaper published false information with reckless disregard for the truth, the bar for actual malice under defamation law. The exchange has denied central claims in the reporting and says the Journal created a false impression it fired investigators because of their work.
Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York did not rule from the bench after hearing arguments. He took the Journal's motion to dismiss under submission.
The dispute centers on what Binance says the Journal knew before it published. The exchange argues reporters had reason to doubt their own work because Binance disputed the allegations before and after publication. The Journal's response, in its own words: "self-serving denials" do not prove reporters knew their stories were false.
Katherine Bolger of Davis Wright Tremaine, representing the Journal, told the court the case turned on editorial disagreement, not false facts.
"This defamation action springs not from false facts, but from Binance's unhappiness with the way the Journal reported truthful facts," Bolger said. "Binance's unhappiness with the Journal's editorial judgments does not constitute a defamation claim."
Binance attorney Christopher Norman Lavigne of Withers Bergman took the opposite view. He told the court the Journal's coverage, including a February headline that read "Binance Fired Staff Who Flagged $1 Billion Moving to Sanctioned Iran Entities," created a misleading account. The investigators were not dismissed for raising compliance concerns, Lavigne said, and Binance's internal review continued after they left.
"Here you have an article that starts with a conclusion, ends with the conclusion, and peppered all throughout are the conclusion," Lavigne told the judge.
Engelmayer focused part of the hearing on the 22 statements Binance flagged across three Journal articles. He pressed Lavigne to show how each was factually wrong and why those statements met the legal definition of defamation. The judge also asked why Binance had sued only the Journal when The New York Times and Fortune published separate reports about investigators saying they uncovered possible Iran sanctions violations at the exchange.
The Journal cited those other outlets in its defense. Its attorneys said reporting from established news organizations gave the Journal additional reason to believe its own coverage was accurate.
The original stories drew Washington's attention. A Senate inquiry opened in February sought information about the Iran-linked transactions and the dismissal of compliance staff who had investigated them. By March, the Justice Department was examining the same matter, according to a Journal report. Binance has maintained it did not transact with sanctioned entities and said accounts tied to suspicious activity were closed.
The defamation fight follows Binance's 2023 criminal settlement with U.S. authorities, when the exchange admitted anti-money laundering and sanctions violations. Binance paid roughly $4.3 billion and accepted compliance oversight. Changpeng "CZ" Zhao resigned as CEO after pleading guilty to failing to maintain an effective anti-money laundering program and served four months in prison.
President Donald Trump granted Zhao a full pardon in October 2025. Zhao said he was surprised by the decision and denied having a business relationship with Trump's family or World Liberty Financial. White House press secretary Karoline Leavitt said at the time the Biden administration had prosecuted Zhao as part of what the Trump administration called an effort to punish the crypto industry.
Engelmayer did not set a deadline for his ruling on the Journal's motion. The 22 disputed statements and the defamation-by-implication claim remain before the court.
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