By CCN: Binance CEO Changpeng Zhao — who is still reeling after a $54 million bitcoin hack — is suing Sequoia Capital China, a unit of California-based venture capital firm Sequoia Capital.
In his May 20 legal filing with the High Court in Hong Kong, Zhao claims Sequoia Capital China prevented him from raising capital between Dec. 27, 2017 and March 1, 2018 at the height of the bitcoin bull market.
Zhao Seeks an Accounting of Damages
Zhao did not respond to repeated requests for comment from CCN about his claims. However, in his filing, which was leaked to CoinDesk, Zhao claimed:
“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.”
Zhao is seeking an unspecified amount in damages, mainly because he’s uncertain what damages he allegedly incurred.
June 25 Hearing Scheduled
The High Court in Hong Kong has set a June 25 hearing to determine what damages Zhao incurred from an injunction Sequoia obtained against him on Dec. 27, 2017. Zhao claims this injunction prevented him from raising capital from other investors for three months – until March 1, 2018.
In March 2018, Sequoia Capital filed a lawsuit against Zhao, claiming he breached an exclusivity agreement during Binance’s Series A equity financing negotiations.
Here’s what happened: In August 2017, Sequoia agreed to invest $8 million in Binance for an 11% stake in the platform. At the time, Sequoia valued the crypto exchange at $80 million.
The parties continued to talk over the next few months. By December 2017, Binance balked at the deal when the bitcoin price soared to almost $20,000. Zhao’s team told Sequoia that their deal undervalued Binance in light of bitcoin’s meteoric price spikes at the…