Binance chief Zhao Changpeng has formally denied allegations made by venture capital firm Sequoia Capital. The company claimed that he had violated terms of an exclusivity agreement by holding fundraising talks with other potential investors.
Zhao Changpeng, founder of the world’s largest cryptocurrency exchange by trading volume Binance, has officially denied allegations made by venture capital firm Sequoia Capital about a failed funding deal.
The case stems from the collapse of negotiations for an investment in Binance by Sequoia. Sequoia Capital is a private fund applying research and technology to the global derivatives markets as part of a low-risk, high-volume hedged trading strategy.Located in Menlo Park, California, Sequoia manages multiple investment funds including those specific to India, Israel, and China.
In late December, Sequoia obtained a temporary injunction, to keep Zhao from engaging in negotiations with other firms, namely IDG Capital which has offered two cash injections of $400 million and $1 billion in valuing Binance far higher than Sequoia. After that, the dispute became public. Sequoia Capital sued Zhao in a Hong Kong lawsuit claiming that he breached an exclusivity agreement with a noted VC firm while negotiating over a potential investment.
Yesterday, Binance published a blog post which states that “Mr. Zhao denies all of SCC’s allegations relating to the present dispute”.
From the words of the exchange, Sequoia has been ordered to pay Zhao’s costs in relation to the legal proceedings. Binance confirmed that the ‘ex parte conjunction’ was obtained without notice to Zhao. However, Zhao challenged the injunction this month and the Hong Kong High court has since dismissed the judicial order.
“SCC obtained an ex parte injunction without notice against Mr. Zhao at the end of December 2017. After a hearing attended by both parties’ legal representatives in April 2018, the High Court of Hong Kong has now determined that this injunction should not have been granted, as it had been improperly obtained and constituted an abuse of process by SCC. On this basis, SCC was ordered to pay Mr. Zhao’s costs in relation to the legal proceedings,” the post reads.
According to the company’s blog on Medium, Binance founder will make no further comment on the matter, as the substantive issues in dispute between the parties are subject to confidential arbitration proceedings.
Binance is an international multi-language cryptocurrency exchange. It is the world’s largest exchange by trading volume. Binance has its own digital currency, named Binance Coin and based on Ethereum.
According to CoinMarketCap, Binance Coin price is $13,89 per token. Earlier the exchange reported that it was planning to establish its office in Malta, after receiving an official warning letter from the Japanese Financial Services Authority (FSA) demanding to obtain license for continuing its operations in the country.