Blockchain analytics firm Chainalysis is set to appear in a New York Supreme Court hearing on October 16, 2024, over a $650 million defamation lawsuit. The suit was filed by Exceptional Media Ltd., the company behind YieldNodes, after Chainalysis labeled the YieldNodes investment project an “investment scam.”

Exceptional Media is seeking $650 million in damages, claiming the label severely damaged their reputation and client base. The lawsuit also accuses Chainalysis of acting with malicious intent. The dispute stems from a phone call in January 2023, where a Chainalysis representative allegedly told YieldNodes that the project had been classified as a scam but hinted the label could be downgraded to "high-risk" in the future.

Chainalysis has since filed multiple motions to dismiss the case, arguing that Exceptional Media failed to prove that YieldNodes is not a scam. In their defense, Chainalysis stated that the YieldNodes project fits the characteristics of an investment scam, often promising unrealistic returns through an algorithmic trading strategy.

The firm further argued that the lawsuit’s failure to demonstrate how their analysis was incorrect strengthens their position. Additionally, Chainalysis claims the New York Supreme Court lacks the necessary jurisdiction to rule on this type of commercial dispute.

As the legal battle unfolds, the court will determine whether Chainalysis’ categorization of YieldNodes was defamatory or simply a valid assessment of the project’s risks.