One of Binance’s early investors, Weixing Chen, is preparing to sue the cryptocurrency exchange over allegedly undervalued shares. Chinese journalist Colin Wu reports this.
\n
\n
\n
Exclusive: Binance’s early investor is preparing to sue Binance. What happened? Weixing Chen said that he invest several million three years before, but Binance did not give confirmation of shares and not allow transfer. Binance only allows him to withdraw at a very low price. pic.twitter.com/8F36JYqG3G
\n
— Colin Wu（WuBlockchain） (@WuBlockchain) September 2, 2020
\n
\n
Weixing Chen asserts that in October 2017 he bought about 5% of Binance’s shares. At that time the exchange had been operating for several months and valued itself at $70 million. Together with a group of other investors Chen invested more than $3.5 million in Binance.
\n
According to Wu, by 2020 Binance’s valuation had approached $10 billion. But the exchange refused to buy the shares back at such a market value. Investors were offered to sell the papers on installments, valuing the company at $600 million. This prompted him to go to court.
\n
The journalist believes Chen has little chance of success in court. Binance has many corporate entities and hides a lot, he noted.
\n
How the Binance exchange hides its legal structure from regulators and users
\n
\n
Most early investors in similar cases chose to settle with Binance, Wu noted.
\n
As a reminder, Binance has become a defendant in several class-action lawsuits in the United States.
\n
Follow ForkLog news on Twitter!