‘Tai Chi’ Document Saga: Binance Drops Lawsuit Against Forbes

In a document filed with the United States District Court of New Jersey, Binance dropped the lawsuit filed against Forbes in November 2020. The case was in response to Forbes’ story, where it alleged that the cryptocurrency exchange was brewing plans to exploit United States investors through a sham company.

Binance, through its attorneys, Peter J. Pizzi and Selina M. Ellis, have now dropped its defamation lawsuit, which was filed against Forbes last year. The new document calls for a “voluntary dismissal without prejudice” of the lawsuit filed against Forbes Media, Michael del Castillo, and Jason Brett, the masterminds behind the article that called the exchange out on alleged exploitative plans.

Although a judge has approved of the dismissal, Binance Holdings have left open the possibility of re-filing charges in the future as the case was dismissed “without prejudice.”

The Prelude

Global media giant Forbes published a comprehensive report on alleged activities tailored by Binance to mislead regulators in the United States in October 2020.

Binance had earlier restructured its operations in the United States by birthing Binance US due to strict regulations that prohibit the trading of highly leveraged cryptocurrency derivatives. The report written by Forbes publishers Michael del Castillo and Jason Brett claimed that despite Binance’s regulatory compliance, it was nursing ambitions to benefit from US investors through nefarious means.

In the story, Forbes reported that Binance was setting up a company which is labeled the “Tai Chi entity.” It was set up as a front to make money and funnel to its parent company, Binance while evading regulations and sidestepping relevant government agencies. According to the Tai Chi slideshow, Binance aimed to achieve this by teaching its customers how to bypass location constraints.

Forbes said that the “Tai Chi” slideshow was prepared by Harry Zhou, a former Binance employee. It further alleged that Binance’s Chief Compliance Officer, Samuel Lim, affirmed via an email that Zhou was indeed an employee.

Binance vehemently denied the allegations and sent complaint letters to the defendants, requesting for retraction of their claims and an apology. Forbes stood their ground, insisting that their story was based on “exhaustive investigations.” In November 2020, Binance responded by suing Forbes.

An excerpt from the initial lawsuit reads:

The Story contains numerous false, misleading and defamatory statements about
Binance. Among other things, the Story falsely states that Binance created an “elaborate scheme to evade Bitcoin regulators,” “conceived of an elaborate corporate structure designed to intentionally deceive regulators”.