Venture company Sequoia Capital sued the CEO Binance because of a failed transaction

Venture company Sequoia Capital sued the CEO Binance because of a failed transaction

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The founder of one of the largest cryptocurrency exchanges in the world acts as a defendant in the case of violation of the contract on granting exclusive rights.

As reported by Bloomberg, against the CEO of Binance Changpeng Zhao, a lawsuit was filed in Hong Kong by the California venture capital company Sequoia Capital.

Referring to the court documents dated March 26 and April 24, the publication says that the subject of the proceedings was the discussion of Sequoia’s investment in the Binance stock exchange, which began last August when the trading platform was launched.

As the talks continued, Zhao allegedly stated Sequoia in mid-December, when the cost of bitcoin reached a historic high above $20,000, that the proposed $80 million for an 11 percent stake in his company did not meet the expectations of shareholders.

At the same time, Zhao negotiated with another potential investor, IDG Capital, who expressed his readiness to invest his funds in the exchange in two stages, giving it a much higher estimate: $400 million and $ 1billion, respectively. Thus, Sequoia accuses Zhao of violating the treaty on the granting of exclusive rights.

Bloomberg notes that, although initially the companies intended to resolve the dispute arbitrarily, Sequoia applied to the High Court of Hong Kong to prevent further negotiations with potential investors from Binance.

The Hong Kong court allegedly ordered Zhao not to negotiate with other investors until a decision on the case was made.

According to Zhao, Binance is estimated at about $3 billion and that only last quarter the company earned $200 million, while refusing to share financial statements of the exchange. Zhao keeps the offices and servers of Binance in secret, although earlier he said that the exchange is based in Hong Kong. Last month, Zhao announced that Binance was organizing operations on the European island nation of Malta.

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