Changpeng Zhao to Sue Sequoia Capital

CEO Binance believes last year's Sequioa's lawsuit against Binance caused "loss of chance to raise capital" and "damage to my reputation"
23 May 2019   278

Changpeng Zhao, head of the Binance, intends to continue litigation with Sequoia Capital, a venture capital company, and recover compensation for its reputational losses. This is reported by CoinDesk.

As Zhao claims in a lawsuit filed in the High Court of Hong Kong, Sequoia Capital China has damaged its reputation and prevented him from attracting financing on favorable terms.

In particular, he asks the court to determine whether “the damage was caused and, if so, on what scale,” because of the injunction issued on December 27, 2017 and limiting its ability to raise funds before March 1, 2018.

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.

Changpeng Zhao

CEO, Binance

Sequoia Capital filed a lawsuit against CEO Binance because of a violation of the contract on the granting of exclusive rights in March last year. The subject of the proceedings began negotiations on investing $ 80 million in Binance, which began in August 2017. If they succeeded, Sequoia would have received almost 11% share in the business.

However, in mid-December, when the bitcoin price rose above $ 20,000, Zhao allegedly told Sequoia that the exchange was seriously undervalued in the terms of the negotiated deal, and the proposed amount does not meet the expectations of shareholders.

At the same time, Zhao negotiated with another potential investor in the face of venture capital firm IDG Capital, which offered to invest $ 400 million and $ 1 billion in Binance for two rounds, respectively. Because of this, Sequoia accused Zhao of violating the contract on the granting of exclusive rights and demanded to establish whether the negotiations with IDG Capital violated the terms of their deal.

Earlier, in December 2017, Sequoia Capital, unilaterally and without notice, Zhao obtained an injunction, insisting that by starting negotiations with IDG Capital, the defendant had violated the terms of the agreement on granting the exclusive right to invest in his business.

However, the court subsequently ruled that Sequoia had no reason to seek to limit investment unilaterally, without providing an explanation of why several firms were involved in the process. Attempts to challenge this decision did not succeed, and on December 12, 2018, the panel of judges finally rejected the demands of Sequoia.

Now Changpeng Zhao will act as the plaintiff, promising to give additional information on this issue soon.

CFTC to Approve LedgerX's Deliverable BTC Futures

At the same time, another platforms such as Bakkt, ErisX and Seed CX still awaiting regulatory approval
26 June 2019   65

Cryptocurrency derivatives provider LedgerX LLC has received a license from the Authorized Derivatives Market (DCM) from the US Commodity Futures Trading Commission (CFTC), which will allow it to launch the country's first bitcoin futures.

Deliveries for deliverable futures are made in the underlying asset, not in fiat funds. Thus, LedgerX outstripped the Bakkt, ErisX and Seed CX platforms, which are still awaiting regulatory approval.

At the same time, LedgerX intends to launch the Omni platform for trading options, swaps, and bitcoin futures for retail investors, since at the moment it does not see enough interest from institutional market participants.

However, it should be added that some experts have already expressed fears that the nature of the license received will not allow LedgerX to provide margin tools to customers, and Bakkt should have such functionality.

Recall about the intentions to obtain the appropriate permission and overtake competitors LedgerX said in April.