Zhao Changpeng, the founder of Binance, one of the world’s largest cryptocurrency exchanges by trading volume, has denied an allegation that he breached an exclusivity agreement with a noted VC firm while negotiating over a potential investment.

In a blog post published Thursday, Binance issued a response to a report yesterday which revealed that Zhao is currently facing a lawsuit filed with the Hong Kong High Court by venture capital giant Sequoia Capital.

As reported yesterday, the case stems from the collapse of negotiations for an investment in Binance by Sequoia. After the talks fell through, the VC firm brought the lawsuit against Zhao, accusing him of breaking an exclusivity agreement by talking to another potential investor IDG Capital in December last year.

“Mr. Zhao denies all of Sequoia’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,” the company said.

While a previous Hong Kong court order has temporarily barred Zhao from talking to other potential investors, Binance suggested that the court may have now be having second thoughts on whether the order should have been issued.

The post continued:

“Sequoia 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 [Sequoia].”

Although it did not offer any details on the next stage of the lawsuit, the exchange said Sequoia has been ordered to pay Zhao’s costs in relation to the legal proceedings.

Court gavel image via Shutterstock