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19 November 2020 06:33

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Binance Sues Forbes for Defamation Over ‘Tai Chi’ Document Leak

The latest and most dramatic instance of that will happen next month, when the S&P 500 will admit Tesla Inc. through its club doors for the first time.Take Yahoo Inc. The archetypal dotcom business found its way into America's prime share index in December 1999, just four months before a collapse in internet stocks that took the U.S. more than a decade to recover from. Is this time really going to be any different?To be sure, it looks like Tesla is on more solid footing than two years ago, when regulators were lobbing fraud charges against Elon Musk and the company was, in his words, "single-digit weeks" away from bankruptcy. The auto industry as a whole seems to be performing remarkably well in the grip of Covid-19, with the S&P's automobile and parts sub-index Monday hitting its highest level in more than two years.Tesla is already the 11th-largest company by market capitalization on U.S. exchanges, worth about as much as the world's three biggest carmakers Toyota Motor Corp., Volkswagen AG and General Motors Co. put together. Comparing forward Ebitda to enterprise value, just six companies have higher valuations than Tesla's 49.51 times multiple.It's very hard to see how Tesla will be able to justify those valuations in the long term. That's the case even if you agree with the most bullish analysts and assume the company will be producing about $10 billion a year of net income by 2022 or 2023, compared with $556 million over the past 12 months.

On those numbers, a 20 times price-earnings multiple would produce a business worth not much more than half of Tesla's current $387 billion market cap.That's the true lesson for newcomers to the big indexes. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. In a lawsuit filed today in the U.S. District Court of New Jersey, Binance alleged that an article published by Forbes was defamatory and caused "millions of dollars" in damages. Binance has retained the services of Charles Harder, the attorney best known for representing Hulk Hogan (Terry Gene Bollea) in a suit against Gawker Media. Harder is appearing pro hac vice (one time only) in the case and is therefore not expected to represent Binance in other legal proceedings. In brief Forbes published a story in October that purported to reveal a Binance strategy to evade regulations.

Binance, the world's largest cryptocurrency exchange, has sued Forbes and two writers for publishing a story last month that it calls defamatory. According to the complaint, filed today in US District Court in the District of New Jersey, the article—"Leaked 'Tai Chi' Document Reveals Binance's Elaborate Scheme to Evade Bitcoin Regulators"—"contains numerous false, misleading and defamatory statements about Binance." The article was written by Forbes staff writer Michael del Castillo, with additional reporting attributed to Jason Brett. The Forbes article relies on "a document thought to be created by a senior executive" and "believed to have been seen by senior Binance executives," including CEO Changpeng "CZ" Zhao. According to the lawsuit, the "Defendants' false public statements, misrepresentations and innuendo that Binance does not comply with applicable law, seeks to evade regulators, and is engaged in activity 'characteristics of money laundering' are highly damaging to Binance." Binance maintains that, because it did not receive a retraction and apology from Forbes, it's moving forward with the lawsuit. One of the attorneys who filed the suit on Binance's behalf is Charles Harder, who represented Hulk Hogan in a privacy invasion lawsuit against Gawker Media that netted the wrestler a $31 million settlement.

In what is a breaking development, Binance Holdings Ltd. today filed a defamation suit against Forbes Media LLC before the U.S District Court of New Jersey. Representing the Changpeng Zhao-led Binance, arguably the world's biggest crypto-exchange, the petitioner is suing Forbes and two of its journalists over a story they published last month. The news article in question claimed that Binance was "intentionally" deceiving U.S regulators and "surreptitiously profiting from crypto-investors" via an "elaborate corporate structure." The said article was reported to have been based on a document authored by a Binance official. It should be noted, however, that Binance, as soon as the article came out weeks ago, was quick to deny any truth in these allegations, while also contesting the allegation that the "Tai Chi" document was authored by a Binance employee. According to Forbes, Binance allegedly made plans to use a U.S company, dubbed the "Tai Chi entity," later established as Binance.US, in an effort to distract regulators.

As previously noted, the CEO of Binance Changpeng Zhao (CZ) was quick to respond after he tweeted that the statements and accusations in the article were incorrect, dubbing them as "FUD." In the aforementioned lawsuit, Binance claims that Forbes and its journalists harmed the crypto-platform by publishing an article that "contains numerous false, misleading and defamatory statements." It said, Binance also demanded that Forbes take down the article, while also paying punitive damages to be determined at the time of trial. Key Takeaways Binance has filed a suit in the state of New Jersey against Forbes, Michael del Castillo, and Jason Brett. Forbes alleged that Binance had hatched an "elaborate scheme" to evade Bitcoin regulators in the U.S. On Oct. 19, Forbes published an article accusing Binance of establishing a legal entity to "surreptitiously profit from crypto investors in the United States." The article claimed that Binance had "funneled" money between the U.S. entity and the parent company, using the U.S entity as a decoy to deceive regulators. Forbes staff writer Michael del Castillo and contributing writer Jason Brett went so far as to compare Binance to "Amway-style multi-level marketing organizations," strongly asserting that the exchange was knowingly taking part in money laundering. Binance claims that the article, entitled "Leaked 'Tai Chi' Document Reveals Binance's Elaborate Scheme To Evade Bitcoin Regulators," was defamatory and incorrect. The lawsuit lists 20 separate statements in the Forbes article, which the exchange claims are false, misleading, and defamatory.