Binance CEO Zhao Changpeng has formally denied allegations made by venture capital firm Sequoia Capital about a failed funding deal.
A subsidiary of Sequoia Capital China (SCC) sued Zhao in a Hong Kong lawsuit claiming the crypto exchange founder had violated terms of an exclusivity agreement by holding fundraising talks with other potential investor, IDG Capital. Negotiations between Sequoia and Binance broke down after Binance shareholders were not impressed by Sequoia’s valuation of Binance, at a proposed $80 million. IDG Capital offered two cash injections of $400 million and $1 billion in valuing Binance far higher than Sequoia.
Sequoia obtained a temporary injunction, in late December, to keep Zhao from talking to other potential investors.
In today’s statement Binance confirmed that a temporary injunction was obtained without notice against Mr. Zhao. 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 two parties will continue to work on settling the dispute in arbitration, Binance legal team said.