Sequoia Capital is Suing Crypto Exchange Binance
The CEO of Binance, Zhao Changpeng, is being sued by venture capital firm Sequoia Capital after a funding deal went south. Allegedly the grounds for the lawsuit are the fact that Binance breached their exclusivity clause.
The negotiations for the deal was ongoing in December last year between the two companies. In the last two court hearings of the case, dated 26th March and 24th April, the lawyers shed light on the how, where and when of the negotiations between Zhao Changpeng and Sequoia.
Binance and Sequoia started negotiating terms in the month of August 2017 and went on till December, when the crypto market saw its biggest hike. With a single bitcoin raising to about $20,000 USD.
Sequoia valued the exchange at $80 million USD and planned to have a 11% stake. For which Zhao Changpeng thought that the firm had undervalued the company and approached other investors, in particular IDG Capital.
According to reports, IDG Capital proposed to conduct two rounds of funding. The first of which would have been $400 million and the second $1 billion.
The complaint that was filed by Sequoia states that the firm is worried that Zhao may have breached confidentiality by approaching another investor. The entire story broke when the venture capitalist filed for a temporary year-long injunction to bar Zhao Changpeng from approaching other investors.
On approaching IDG Capital, in response to Bloomberg, has denied that they have any connections with Zhao Changpeng and refused that they had invested in his cryptocurrency exchange, Binance.
The dispute between the two companies will now be settled in arbitration over the next couple of months.