Exchange Binance Received a Claim from Venture Capital Company Sequoia Capital
The CEO of the exchange Binance Changpeng Zhao received a claim from the California venture capital company Sequoia Capital for breach of contract, which contained the granted exclusive rights. The claim was filed in Hong Kong, Bloomberg reports.
The judicial document specifies that the reason for the complaint of the proceedings were negotiations, which began in August of 2017, regarding the investment of $80 million into Binance. Upon successful completion of the transaction, Sequoia was to receive 11% of the business profit.
Nevertheless, in mid-December, at a time when the cost of Bitcoin was about $20 thousand, Zhao publicly suggested that the Sequoia stock exchange was seriously underestimated in the process of forming the terms of the deal, and the estimated amount did not meet the expectations of the shareholders.
At the same time, Zhao was in the process of negotiating with other potential investors in the guise of venture capital company IDG Capital, which proposed investing $400 million into Binance and $1 billion into two stages, respectively.
As a result, Sequoia brought charges against Zhao about violation of the terms of the deal on securing exclusive rights and the requirement to determine whether the conditions of their deal with IDG Capital were met.
In pursuit of the goal of preventing further negotiations between Binance and potential investors, Sequoia resorted to the help of the Supreme Court of Hong Kong. However, the court has already established limiting conditions for the negotiations of the Binance leadership up to the announcement of the verdict in the case.
The case participants themselves do not want to comment on the situation. However, the Bloomberg edition refreshed everyone's memory by highlighting Zhao's recent statement that "the cryptocurrency site does not need external infusions, and cooperation with venture funds helps the exchange to obtain licenses and successfully interact with regulators."
According to Zhao, the cost of Binance is $3 billion. However, no financial statements of the exchange have been submitted to confirm this information so far.
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