Early investor in Binance is going to sue the exchange

The investor disagrees with the assessment of the value of his stake in the company. Binance offered to repurchase his shares at a price corresponding to capitalization of $ 600 million, while, in reality, the cap of the exchange is much higher.

One of the early investors in the Binance cryptocurrency exchange, Weixing Chen, intends to sue it. According to Chinese journalist Colin Wu, Chen is not pleased with the valuation of his stake in the company.

Chen claims to have bought 5% of Binance in October 2017. At that time, the exchange was just starting its operations and was estimated at $ 70 million. Chen and his partners spent about $ 3.5 million on shares, but since then Binance’s capitalization has grown considerably.

Binance is currently the largest spot market in the world. According to CoinMarketCap, its daily trading volume exceeds $ 14 billion. For comparison: the daily trading volume of its closest competitor – Huobi Global – is estimated at $ 4.2 billion.

Based on the indicators of trading activity, trade volumes and the number of users, the capitalization of Binance should correspond to the valuation of the American exchange Coinbase, which is, $ 10 billion. However, when Chen decided to sell his securities, Binance offered to repurchase his shares in installments at a price corresponding to the capitalization of $600 million.

Wu noted that this is not the first time when Binance investors have disputes with the company over the fairness of their valuation. However, taking into account the size of the economic base of the exchange it is almost impossible to succeed in court. This is why most of the early investors in the exchange agreed to compromise.

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