(BlockBar) Binance founder and CEO Changpeng Zhao is seeking damages from venture capital firm Sequoia Capital China. Changpeng Zhao, also known as CZ in the industry, claims Sequoia Capital China for having hurt his reputation and preventing him from raising capital at favorable valuation and he wants the VC firm to compensate for it.
CZ, via his attorney ,filed an application on May 20 to the High Court in Hong Kong for a hearing in order to get a summary of damages caused as a result of the ex parte injunction order Sequoia obtained against him in December 2017. It is to be noticed that this injunction was later found to be improperly obtained.
According to the Hong Kong judiciary website, a hearing of case (HCMP 2770/2017) will take place on June 25 between Zhao and SCC Venture VI, a company incorporated as a special purpose vehicle of Sequoia Capital China. The inquiry is being asked to held to determine if Zhao has sustained any and what damages. The CEO seeks for compensation of an unspecified amount. This amount is to be determined at the inquiry from Sequoia, if and only the court determine that Zhao sustained any such damages.
Zhao’s new filing states:
Damages hearing on 25 June 2019 will determine the entitlement to and subsequently the scale of damage for: (a) a loss of chances for raising funds (b) damage to reputation.
The dispute between CZ and the VC firm started in December 2018 when Sequoia obtained injunction order in ex parte without any notifying the CEO . Sequoia capital claims that Zhao had breached an exclusivity agreement during negotiation for a Series A equity financing deal by talking to IDG Capital. In April 2018, a Deputy High Court Judge ruled that the ex parte had been improperly obtained. The court said it was wrong to pursue the ex parte application without a notice to Zhao.
Both the parties then proceeded with the arbitration in May 2018 before a three-member tribunal at the Hong Kong International Arbitration Center.
A final decision made in 2018 by the Tribunal where it dismissed Sequoia’s claims that Zhao had breached exclusivity based on the findings that the discussion with IDG Capital was for a Series B round financing.