Crypto Tycoon Resigns from Blockchain Fund After Alleged Defamation

Li Xiaolai, a noted cryptocurrency investor and early bitcoin evangelist in China, has resigned from his role as managing partner of the $1 billion Hangzhou Xiong'An Blockchain Fund after alleged defamatory comments were made against him.

The sudden departure comes as the result of an ongoing internet feud between Li and Chen Weixing, a venture capitalist who in recent months has made a series of hostile comments in public against the investor.

Li announced his resignation on his Weibo account on Monday night, saying he made the decision in order to preserve the reputation of the government-backed blockchain investment fund launched in April of this year.

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."

As previously reported by CoinDesk, back in June, Chen openly described Li as a "fraud" and a "tumor" of the cryptocurrency industry. He later alleged that Li owed a group of investors 30,000 bitcoin that he had collected in 2013 for an investment fund, but could not repay since he had gambled away the assets.

Li later responded with detailed explanations to each of Chen's accusations, but the spat did not end there. Things soon sparked off again as an obscenity-laden recording of a private meeting between Li and several individuals was leaked through social media on July 3, stirring up controversy within the Chinese cryptocurrency community.

In the 50-minute chat, recorded in January, Li took aim at various individuals and companies within the industry, calling Qtum's co-founder Shuai Chu a "spin doctor," Binance exchange a "cheating" platform and Softbank a "stupid fool" for investing in Ripple.

Chen went public again following the audio leak, accusing Li of being a "foul-mouthed liar." He further questioned the legality of the Xiong'An Blockchain Fund, asking whether the local government has indeed allocated the apparently promised 30 percent of the funds.

Then, last Friday, Li announced through his WeChat channel that he had filed a lawsuit with a local court in Hangzhou accusing Chen of defamation. He went on to say that Chen has no knowledge of blockchain and can only make his name by defaming others.

Chen responded on Weibo that he believes the lawsuit will turn out to be his chance to take on Li in court and calling for "victims" to join him.

Exit sign image via Shutterstock

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