Binance founder and CEO Changpeng Zhao is taking a unit of Sequoia Capital back to court after the VC investor’s case against him was dismissed.
The crypto exchange mogul, nicknamed CZ, claims Sequoia Capital China hurt his reputation and prevented him from raising money at favorable valuations and wants the VC giant to compensate him.
According to a filing submitted on May 20 to the High Court in Hong Kong and obtained by CoinDesk, Zhao has sent an application via his attorneys for a hearing before the court chambers on an order for “immediate summary of assessment of damages.”
A hearing for the case, HCMP 2770/2017, will take place on June 25, according to information available on the court’s website, between Zhao and SCC Venture VI, a company incorporated as a special purpose vehicle of Sequoia Capital China.
The application demands an inquiry be held to determine if Zhao “has sustained any and what damages” resulting from the injunction order Sequoia obtained on Dec. 27, 2017, which prevented Zhao from raising capital from other investors until March 1, 2018.
If it’s decided that “any such damage has been sustained,” Zhao asks that Sequoia pay him the amount determined at the inquiry. (He did not suggest an amount.)
Zhao stated in the new filing:
“The injunction order has caused loss to me for which I am entitled to reasonable compensation by Sequoia. In particular, I have suffered i) a loss of chance to raise capital through successive rounds of financing at increasing high valuations; and ii) damage to my reputation.”
Sequoia Capital China has not responded to CoinDesk’s request for comment as of press time.
Zhao’s punch-back follows a December 2018 decision by the Hong Kong International Arbitration Centre, which dismissed all of Sequoia Capital’s claims that Zhao had breached an exclusivity agreement when negotiating Binance’s Series A equity financing.
‘Abuse of process’
The case began when Sequoia Capital obtained the December 2017 injunction order in an ex parte or unilateral procedure without notifying Zhao and subsequently filed a notice for arbitration in January 2018 as a claimant against him.
Sequoia accused Zhao of breaching exclusivity by talking to IDG Capital when still in discussions with Sequoia for the Series A round.
Three months later, following an April 11 hearing, a Deputy High Court Judge ruled in a judgment on April 24 that Sequoia “was wrong to pursue the ex parte application without notice to Zhao,” since there was no explanation or evidence as to why no efforts were made to involve both parties.
“I agree that the use of the ex parte procedure without notice to D. [Defendant, Zhao] was an abuse of process,” the judge said. “If the Injunction were not already spent, I would have set it aside on that basis alone.”
The parties then proceeded with the arbitration in the following months in 2018 with the submission of various evidence before a three-member tribunal at the Hong Kong International Arbitration Center.
According to a final decision made on Dec 14, 2018, the Tribunal dismissed Sequoia’s claims that Zhao had breached exclusivity based on the findings that the discussion with IDG Capital was, in fact, for a Series B round financing.
“The Tribunal finds that that the negotiations with IDG were not in respect of a ‘rival transaction’ to the Series A Financing but were in respect of a proposed Series B financing transaction which was not in competition with the Series A Financing and which did not become a Series A Financing,” the Tribunal stated in its decision.
- Source: First Appeared Here
- Published Time: 2019-05-23 03:40:07
The views and opinions expressed in the article Binance CEO CZ Is Suing VC Giant Sequoia for Reputational Damages do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
⚡️ Explore Our Cheap Efficient Cryptocurrency Advertising Services
We offer a variety of cryptocurrency advertising options including: Facebook posts, Twitter Tweets, Pinterest Pins, Web Banners, STO listings, Exchanges, Casino Banners, ICO listings, Article Links and Conference Landing Page Links!
Aren’t You Curious How’s Your Favorite Cryptocurrency Performing Today April 21, 2021?
Check out our price index page! Pick your favorite cryptocurrency to see its data; crypto prices, crypto market capitalization, trading pairs, buy or sell, analytics, charts, FIAT calculator, social media links, latest tweets and much more!
|#||Coin||Price||Price Graph (7D)|