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Newsweek Returns with a Thud [Updated]

IBT Media’s Zombie Newsweek debuted only yesterday, and already there’s a problem. A big one. Newsweek’s cover story claimed that Dorian Satoshi Nakamoto, a 65 year old engineer, created Bitcoin. The media freaked out, with some proclaiming the piece “brilliant journalism.” The problem? Nakamoto has denied any involvement with the digital currency.

In a two hour interview with the AP, Nakamoto denied having any involvement in Bitcoin, and the only reason he had ever heard of it was because a Newsweek reporter contacted his son three weeks ago. Nakamoto also said that during during a brief interview at his home, the Newsweek reporter —  Leah McGrath Goodman — misunderstood him (English isn’t Nakamoto’s first language).

Goodman claimed Nakamoto said ”I am no longer involved in that [Bitcoin] and I cannot discuss it.” However, Nakamoto insisted he meant he was no longer involved in engineering, and was referring to security protocol as it pertained to his former work with a defense contractor.

Goodman told the AP that “There was no confusion whatsoever about the context of our conversation —and his acknowledgment of his involvement in bitcoin.” Newsweek’s editor, Jim Impoco, also issued a statement saying the magazine was standing by its story.

By standing by its account, Newsweek is essentially calling Nakamoto a liar. So why not explain why Nakamoto would do that? What’s his motive for denying this? And Mcgrath Goodman could squash the skeptics quickly by releasing audio files or text of her interview with Nakamoto. But so far, nothing. Nothing but people questioning the facts of a giant story.

If Newsweek wants to impress people with its return to print and prove to people that it is a relevant magazine, this isn’t the way to do it.

Update (12:32 pm):
Newsweek has issued the following statement about the article. It’s pretty standard stuff, though the line “Newsweek encourages fellow members of the press and the public at large to focus on analysis of the facts” is pretty rich.

Leah McGrath Goodman’s recent cover story for Newsweek, investigating the identity of Bitcoin founder Satoshi Nakamoto, has generated an immense amount of international attention, including denials from Mr. Nakamoto and ad hominem criticism of Ms. Goodman’s reporting and character.

Newsweek published this story because we felt it is an important one. While the virtual currency has become popular, it remains mysterious and volatile. We recognized a public interest in establishing some core facts about Bitcoin and better informing those who might invest money in it.

Ms. Goodman’s research was conducted under the same high editorial and ethical standards that have guided Newsweek for more than 80 years. Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman’s reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin.

It is natural and expected for a major news revelation such as this to spark debate and controversy. Many of the greatest journalistic scoops have prompted similar reaction. Such debate is part of the democratic process and essential to the functioning of a free press.  Newsweek is committed to furthering that spirit of open discourse. At the same time, Newsweek encourages fellow members of the press and the public at large to focus on analysis of the facts at hand rather than rush to assumptions or resort to emotion.

Moreover, it encourages all to be respectful of the privacy and rights of the individuals involved.

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