Binance has been accused of violating an exclusivity agreement with venture capital firm Sequoia Capital, which had reportedly considered a substantial investment in the cryptocurrency exchange. The High Court of Hong Kong has granted a temporary injunction against Binance, suspending the company from business discussions with potential investors.
UPDATED | April 26, 2018:
Binance has issued a statement denying “all of SCC’s [Sequoia Capital’s] allegations relating to the present dispute.” The exchange added, “As the substantive issues in dispute between the parties are subject to confidential arbitration proceedings, [CEO] Mr. [Changpeng] Zhao will make no further comment on the matter.” Per Bloomberg, the High Court of Hong Kong has said that the temporary injunction (which barred the exchange from negotiations with other investors) would be removed after it was challenged by Binance.
ORIGINAL | April 25, 2018:
On Wednesday, it was reported that cryptocurrency exchange Binance has been engaged in an ongoing quarrel with Sequoia Capital, a Menlo Park, California venture capital firm that has invested in the likes of Google, Yahoo!, and Oracle. Filings from the Hong Kong High Court indicate that Sequoia sued Binance after a potential investment deal fell through, according to Bloomberg.
It appears that after Sequoia’s original offer, Binance received higher valuations from other interested venture capital firms, including IDG Capital (though IDG stated that it has not invested in the exchange). These higher valuations might have led Binance to balk at the Sequoia deal, which called for the venture capital firm to acquire 11 percent in Binance, while providing the exchange with an approximately $80 million valuation. The subsequent proposal from IDG seems to have offered the potential for a much higher valuation (as much as $400 million to $1 billion).
The controversy became public when the High Court of Hong Kong approved a temporary injunction against Binance. The injunction prevents the exchange from negotiating investment deals with other parties.
ETHNews will continue to report on this story as it develops.
Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.
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