Sequoia Capital has moved to sue the founder of Binance which is at this point in time the largest cryptocurrency exchange in Hong Kong. This venture capital firm faced allegations in line with the violation of an exclusivity agreement.
Zhao Changpeng is the big name behind Binance. He is its founder and at the same time the serving chief executive. Most of the concerned parties are eager to see how the Hong Kong’s high court will make its ruling. This follows the move by the Californian Sequoia Capital to sue it over claims that it broke an existing deal.
A close reference was made to a number of the court documents that were filed on Tuesday March 26 and the one thing that is coming out clearly is the fact that Zhao had earlier on taken to negotiating terms with Sequoia regarding an investment in Binance. This was during its unveiling which took place in August in the previous year.
There are a few details emanating from the court filings and the one thing that is coming out clearly is the point that there are several terms that could have helped Sequoia channel almost $8 million for an 11 percent stake in Binance. That is in line with talks held earlier on that valued the cryptocurrency exchange at $80 million.
The passage of time witnessed talks progress swiftly and it was in mid-December bitcoin (BTC) was approaching its record all-time high which was about $20,000. In a report, Zhao’s team had proceeded to inform Sequoia the $80 million that was proposed was being considered an undervaluation by the shareholders of Binance at that point.
Sequoia is taking the strong stand that Zhao was entirely in violation of the exclusivity agreement that was struck with the firm after getting into discussions with IDG Capital, a competitor.