Sequoia Capital Sues Binance Founder
April 26, 2018
The founder of major crypto exchange Binance Zhao Changpeng is to face trial after lawsuit filed against him by the American venture firm Sequoia Capital. The case will be examined by the High Court of Hong Kong.
As court documents say, Sequoia Capital and Binance held negotiations on investments in December when the exchange just started operating. In mid-December amid highest ever Bitcoin rate and rise of crypto market Zhao would claim, the supposed investment of $80 mln for 11% of exchange stake did not meet the expectations of shareholders.
The documents also tell, as soon as the deal got scuttled, Zhao started talks with another potential investor, venture company IDG Capital, that was ready for investing $400 mln in two financing rounds. Sequoia Capital considered these negotiations to be a violation of agreement of exclusivity.
Bloomberg reports, although the parties tried to settle the matter in arbitration first, finally Sequoia Capital filed a lawsuit with the view to put constraints on Binance negotiating with would-be investors. The court is told to prohibit Zhao to communicate with investors until hearing held defines his responsibility for charges.