Zhao Changpeng is being sued by American venture capital firm over claims that he failed to honor an agreement to receive financial backing in December in exchange for granting the firm a stake in Binance

Sequoia Captial China, a Sequoia Captial subsidiary, allege that the Binance CEO has broken an exclusivity agreement by accepting capital from another firm when their negotiations broke down.

Binance and Sequoia were discussing a deal which broke down, during the December price surge which saw Bitcoin priced at $20,000.  Binance shareholders reportedly felt that the proposed valuation of $80 million would have undervalued the Binance platform which launched only last year.

As the Sequoia deal was called off Binance reportedly held an audience with representatives from IDG Capital to discuss a financing deal which valued the platform over two funding rounds at $400 million and $1 billion respectively. By engaging in these talks, Sequoia claim that Binance breached exclusivity, and Bloomberg’s report claims that the firm are taking Binance to court in Hong Kong to gain a temporary injunction which will prevent Binance from tallking to other potential investors until the arbitration is settled between them.

The court has apparently provided the injunction which will prohibit Binance from discussing financing with other capital firms. Binance responded today in a short post on Medium to state that Mr. Zhao denies the allegations leveled against him in the lawsuit.

Mr. Zhao denies all of SCC’s allegations relating to the present dispute.

As the substantive issues in dispute between the parties are subject to confidential arbitration proceedings, Mr. Zhao will make no further comment on the matter.