Sequoia Capital has sued Zhao Changpeng, founding father of Binance, for breaching an exclusivity agreement.
According to the report by Bloomberg, Sequoia Capital filed suit against Zhao Changpeng on April 24th, 2019 . The filings reveal the interactions Zhao and Binance had with some of the most prominent expansion capital firms in finance.
There lots of remarkable growth stories in the cryptocurrency industry, but Zhao and Binance’s meteoric?rise might be the current pinnacle. Zhao has developed into a cult estimate the industry, gracing the covers of popular tech magazines including Forbes and amassing an individual fortune that they values at $2 billion.
Zhao brilliant company didn’t only attracted popular finance magazines all parts of everything, they have also drawn scrutiny from regulators.? Citing claims that they’re going to be disregarding securities laws, regulators are already clamping down on crypto exchanges worldwide.
According into the Bloomberg report, Zhao and Sequoia Capital began negotiating terms to get an investment in Binance in August, which would have given Sequoia an 11% stake in your exchange and valued Binance at approximately $80 million.
Talks advanced for quite a few months, where time prices of cryptocurrency also soared to all-time highs. However, negotiations forwards and backwards parties stopped working in mid-December, at about the time that?Bitcoin peaked within a record $20,000 exchange rate.
On the 14th of December, Zhao’s team told Sequoia that Binance’s existing shareholders felt their offer hugely undervalued Binance.
From the Bloomberg report:
Around duration, Zhao was approached by another Venture Capitalist firm, IDG Capital, having an offer that valued Binance in the higher valuation?of $400 million and $1 billion respectively, following the injection of two rounds of funding.
The issue in court now is whether Zhao’s talks with IDG Capital violated the exclusive agreement he signed with Sequoia. While Sequoia and Zhao happen to have been trying to settle their dispute through arbitration, the fact became public when Sequoia secured a brief injunction to bar Zhao from discussing with other investors.