Binance Denies Sequoia Capital Allegations, Cites Abuse of Courts

Binance released a statement in which its founder denied that he violated Sequoia's exclusivity agreement and accused the company of abusing the court system in Hong Kong.

Binance posted a statement on April 26  in which its founder denied breaching Sequoia Capital’s exclusivity agreement. The company also accused Sequoia of abusing the Hong Kong court system.

“[Sequoia Capital China] obtained an ex parte injunction without notice against Mr. Zhao at the end of December 2017. After a hearing attended by both parties’ legal representatives in April 2018, the High Court of Hong Kong has now determined that this injunction should not have been granted, as it had been improperly obtained and constituted an abuse of process by SCC. On this basis, SCC was ordered to pay Mr. Zhao’s costs in relation to the legal proceedings,” Binance wrote.

The cryptocurrency giant added that its founder denies every allegation put forward by Sequoia and will no longer comment on the matter. The two parties will now enter arbitrage, thus avoiding any further legal battles in court.

In August 2017, Sequoia approached Binance with an offer for $80 million in exchange for an 11% stake. As they were hashing out negotiations, the price of Bitcoin rocketed, and negotiations ceased. By December, Binance snubbed the deal due to concerns that the conditions were unfavorable as the exchange was making an immense amount of profits.

Zhao then started speaking with IDG Capital, which was ready to pay a significantly higher amount for its stake. This move raised the ire of the folks at Sequoia who then decided to sue as the month drew to an end.

Sequoia Capital, based in Menlo Park, California, has held positions in companies such as Airbnb, Apple, Google, Oracle, and PayPal. IDG Capital, which is a part of the San Francisco-based firm IDG Ventures, has invested in Baidu, Circle, Ripple, Tencent, and Xiaomi. Binance made headlines in March when Zhao announced that the company was planning on moving operations to Malta.