Chainalysis Faces Defamation Suit Over YieldNodes Scam Allegations

According to Cointelegraph, legal representatives from blockchain analytics firm Chainalysis are set to appear at a New York Supreme Court hearing on Oct. 16 regarding a defamation lawsuit filed against the firm in January 2024. The judge will consider a motion to dismiss filed by Chainalysis' legal team. Chainalysis is being sued by Exceptional Media Ltd., the company behind the YieldNodes blockchain investment project. Exceptional Media claims that Chainalysis erroneously labeled YieldNodes as an “investment scam,” causing significant harm to its reputation and client base. The company is seeking at least $650 million in damages and alleges malicious intent. The lawsuit stems from a phone call in January 2023, during which a Chainalysis representative informed Exceptional Media that YieldNodes had been categorized as a scam. The representative mentioned that this categorization could be changed to “high-risk,” but it would take a couple of months. Since the initial filing, Chainalysis has submitted multiple motions to dismiss the case. The firm argues that Exceptional Media and YieldNodes have not provided sufficient evidence to refute the scam allegations. Chainalysis maintains that its report, which identified YieldNodes as an investment scam promising outsized returns based on an algorithmic trading strategy, is accurate. The firm contends that the complaint's failure to explain why YieldNodes is not a scam undermines the plaintiff's claim. Chainalysis also argues that the New York Supreme Court lacks jurisdiction over this type of civil, commercial dispute. Cointelegraph reached out to Chainalysis for comment, but the firm declined to discuss the ongoing court case.