One of China’s most prominent cryptocurrency investors and Bitcoin advocates, Li Xiaolai, has resigned from the Hangzhou Xiong’An Blockchain Innovation Fund, giving up his position as managing partner of the USD 1 billion Chinese startup.
A brief timeline of disputes and allegations
The resignation comes after venture capitalist Chen Weixing publicly began making hostile comments toward Li. Branding the investor as a “fraud” and a “tumor” of the industry, he went on to accuse Li of owing BTC 30,000 to a group of investors, dating back to 2013. According to Chen, this was not repaid as Li had “gambled” the funding away.
Li had later responded in detail to these accusations: “Once again, it’s not true. The fund was a private equity ‘equivalent to 20 million yuan (USD 3 million)’. And I never promised to guarantee the fund’s value using Bitcoin. My quote was ‘We hope (this fund) can outrun the Bitcoin market’. As for the ‘due in September’ part, the fund was set up in a ‘4+1’ model, so it ought to due in September this year. Chen is just muddying the water.”
Audio leak
The dust had barely settled on the matter before a recording of a private meeting that took place in January 2018 was leaked onto social media on 3 July. As reported by local media outlet Baidu, Li took aim at NEO, Tron, Ripple and Binance, going so far as to call the exchange a “scam”.
Chen was quick to follow up the scandal and further questioned the Xiong’An Blockchain Fund, challenging the government’s significant financial backing.
In April 2018, the Blockchain Industrial Park was launched in one of China’s biggest tech hubs, Hangzhou, home to some of the largest tech firms in the country such as Alibaba; USD 400 billion of funding was provided from the government of the city of Hangzhou.
The resignation
On Monday, 9 June, Li announced the resignation on his Weibo account, believing that his decision would maintain the integrity and reputation of the government-backed investment fund.
He wrote: “The series of defamations from Chen Weixing against myself has brought material and negative impacts on the reputation of Xiong’An Blockchain Fund… To let the Hangzhou government continue its push for blockchain development, I will resign from my role as a managing partner.”
However, Li will not be going down without a fight. Last Friday, he announced via his WeChat channel that a defamation lawsuit had been filed against Chen, to which Chen responded, calling for other “victims” to use this opportunity to take on Li in court.
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