Exceptional Media, which is the parent of YieldNodes, a project based in Hong Kong that rents out computing power for participation in masternode pools, has officially filed a lawsuit with the Supreme Court of the State of New York against Chainalysis, which in the 2023 Chainalysis Crypto Crime report, said the project is a scam.
In a press release shared with BitKE by YieldNotes:
“This suit arises out of Chainalysis’s defamatory statements against Plaintiff Exceptional Media Ltd. As described below, Plaintiff suffered substantial reputational and economic loss totaling over $650,000,000 as a direct result of the defamatory false statements published globally by Defendants,” a court document shared by YieldNodes says.
Dear #YieldNoders,
As announced the #lawsuit against #Chainalysis has now been officially filed with the Supreme Court of the State of New York, County of New York.
Find the official document here:https://t.co/Vp3Nem1vxc pic.twitter.com/FsdxT63UcF— YieldNodes Official (@YieldnodesOffic) January 23, 2024
In its recent 2023 Crypto Crime Report, Chainalysis indicated that YieldNodes is the second-largest crypto scam in terms of revenue for 2022, with a total of $341.6 million.
“Upon information and belief, sometime in 2022, Chainalysis decided Yield Nodes was a scam, and flagged blockchain wallets associated with Yield Nodes in its proprietary softwares that it markets globally to law enforcement and government regulatory agencies,” the suit reads.
“Chainalysis did so without ever contacting Plaintiff, something Defendants could have easily done simply by going to the Yieldnodes website.
As a direct result of the globally distributed, inaccurate, and defamatory statements published by Defendants, cryptocurrency exchanges around the world froze cryptocurrency accounts and wallets linked to Yield Nodes and its clients”
Founded in 2014, Chainalysis is a blockchain surveillance firm that provides its products to a range of entities, including exchanges, financial institutions, and law enforcement agencies such as:
- ICE
- IRS
- FBI
- SEC, and
- DEA
Since 2020, Chainalysis has reportedly received over $3.3 million in funding from In-Q-Tel (InQTel), which is the non-profit venture capital arm of the Central Intelligence Agency (CIA).
Exceptional Media is also questioning the software tools used by Chainalysis and its partners in its crime research, pointing to an article that appeared on Coindesk, in which reads:
“The fact that Chainalysis’ blockchain demystification tools have become so widespread is a serious threat to the crypto ecosystem. Although industry insiders have raged against Chainalysis since it was founded, often accusing it of violating people’s financial privacy, there may be a better argument to make against the company and analysis firms like it: it’s within the realm of possibility that these “probabilistic” machines don’t work as well as advertised.”
– CoinDesk
According to Exceptional Media, their business has suffered damages amounting to at least $650,000,000 following its characterization as a scam.
“With respect to all counts, Plaintiff seeks a public apology, retraction of the defamatory statements, compensatory and punitive damages to be determined by a jury at trial.”
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