The latest update on Zhao and Sequoia’s legal dispute is the official statement made by Binance’s legal team that has Changpeng Zhao denying all the allegations made by the Sequoia Capital while stating that the court determines the injunction to be improperly obtained and asks Sequoia to pay the cost of legal proceedings.
Binance legal team: “Mr. Changpeng Zhao denies all of SCC’s allegations”
Just yesterday, it became a public knowledge that the Venture Capital (VC) firm, Sequoia Capital sued the Binance CEO, Changpeng Zhao over the fallen negotiation deal. The Hong Kong High Court had issued an injunction to Zhao ordering him not to indulge in talks with any other investors regarding the Binance exchange.
Neither Zhao, not Sequoia Capital had issued any clarifications on the legal dispute, until now. In an official announcement, the legal team of Binance, took to the exchange’s support page to make an official statement of the Hong Kong legal proceedings between Zhao and a subsidiary of Sequoia Capital China (SCC):
“SCC obtained an ex parte injunction without notice against Mr. Zhao at the end of December 2017. After a hearing attended by both parties’ legal representatives in April 2018, the High Court of Hong Kong has now determined that this injunction should not have been granted, as it had been improperly obtained and constituted an abuse of process by SCC. On this basis, SCC was ordered to pay Mr. Zhao’s costs in relation to the legal proceedings.”
As per the announcement, Changpeng Zhao denies all the allegations made by Sequoia Capital regarding the ongoing dispute. However, the team stayed silent about revealing any other aspects of the dispute as stated:
“As the substantive issues in dispute between the parties are subject to confidential arbitration proceedings, Mr. Zhao will make no further comment on the matter.”
Binance’s CEO has made his stance clear with this statement that puts Sequoia Capital to be the one on the wrong. Though SCC has yet to give its official statement on the matter, things seems pretty clear.
Fallen negotiation deal over Binance’s undervaluation
The dispute started when in August, Sequoia and Zhao began their investment negotiation terms, valuing the exchange at $80 million with an 11 percent Sequoia’s stake in Binance. However, in mid-December, as the cryptocurrency reached its peak, existing shareholders of exchange believed the valuation to undervalued.
At this time, another Venture Capital firm, IDG Capital approached Changpeng Zhao with a much larger funds amount. After this, Sequoia filed a lawsuit against Zhao in the Hong Kong Court for violating the exclusivity agreement. In response, the court issued an injunction that basically banned Changpeng Zhao from negotiating with other investors.
Now, Binance has denied all the allegations made by Sequoia Capital and cleared itself of any accusations, bad publicity, and potential negative impacts.