Defamation suits in crypto show Twitter is a speech minefield — ask Elon Musk

Recent defamation lawsuits have highlighted the perils that face crypto reporters as much as other journalists.

On June 15, lawyers in Austin, Texas, filed a suit against an internet blogger, known under the pseudonym ZachXBT, alleging that he had defamed crypto entrepreneur Jeffrey Huang, also known as Machi Big Brother.

The penalties for defamation can be severe.

On May 2, a court in Florida awarded $3 million damages to Emin Gün Sirer, CEO and co-founder of the blockchain platform Ava Labs. Sirer said he had been defamed by a crypto influencer who had alleged that he was part of a Turkish terrorist group.

Much crypto reporting takes place on Twitter or other social media. Defendants in some lawsuits have been cleared because they agreed to delete allegedly defamatory material.

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They include Elon Musk, who was sued in 2019 after calling a British caver “pedo guy”. The caver was taking part in an operation to rescue 12 boys trapped in a cave in Thailand.

A court in Los Angeles dismissed the plaintiff’s demand for damages amounting to $190 million. The jury accepted Musk’s argument that the remark was not meant seriously and that he had acted promptly to delete it.

A BBC reporter said the jury may have been persuaded by what Musk’s lawyer called the J-DART argument. In short, it works like this: if a joke is taken badly, the defendant may avoid sanction by deleting, apologising and making responsive tweets.

The first trial of alleged defamation on Twitter was held five years earlier, in January 2014. The rock star Courtney Love was sued by her former attorney Rhonda Holmes. The jury cleared Love on the grounds that she had acted without malice.

Most courts in the United States accept absence of malice as a defence against a defamation charge.

That is not so, however, in Britain, where juries have often sided with the plaintiff and have sometimes awarded very large sums in damages. For that reason, and to be on the safe side, the editorial guidelines of DL News take British law as a standard.

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So, what safeguards can a journalist take?

It is usually hard to defend a charge of defamation. All a plaintiff needs to show is that the allegedly defamatory words were published by the defendant, that they apply to the plaintiff and that his or her reputation was harmed.

Publication means sharing the remarks with a third person. If a reporter sends an e-mail to a friend saying that he is writing an article about Mr X, who is a liar and a thief, it counts as publication. Mr X can sue even if the reporter has second thoughts and decides not to write the article. He can also sue the reporter’s friend if the friend repeats the remarks to someone else. If a tweet is actionable, so is a re-tweet.

It is possible to defame someone without naming them — a nickname or an indirect reference may be enough to convince a jury. It is no excuse to say that the defendant meant to refer to someone else.

Even convicted criminals have reputations to defend. Someone who is in jail for dangerous driving can sue for damages if they are falsely accused of a sexual offence, for example.

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Apart from privileged statements made in parliament, the only absolute defences against a charge of defamation in the UK are truth and public interest.

If the words complained of are true, there is no case to answer. But the defendant must prove they are true. The plaintiff does not have to prove the allegation false.

The defence of public interest recognises the media’s role in shaping public opinion.

In 2001, then-Italian Prime Minister Silvio Berlusconi, who passed away in June, sued The Economist for defamation after it published a cover photo of him with the title “Why Silvio Berlusconi is unfit to lead Italy.”

The Economist argued that it had a right to comment on public affairs. A court in Milan agreed and rejected Berlusconi’s suit in 2008. American courts would no doubt have concurred, since the US Constitution guarantees the right to free speech.

But there is a difference between fact and opinion, and the Constitutional right does not include publishing falsehoods.