Binance CEO CZ or Changpeng Zhao aims for a ‘’reasonable compensation’’ from the venture capital giant Sequoia Capital. He stated that the company hurt his reputation and we find out in the altcoin news below why.
The Sequoia Capital China which is the subsidiary of Sequoia Capital allegedly prevented Zhao from raising money at favorable valuations. At the first hearing which will take place on June 25, the court will look into CZ’s demand and will determine whether he ‘’has sustained any and what damages.’’ The VC giant reportedly prevented the Binance CEO to raise capital from other inventors until March 1.
Back in 2018 in December, the Hong Kong International Arbitration Centre dismissed the SQ claims that the Binance CEO CZ breached an exclusivity agreement when he was negotiating with Binance’s Series A equity financing. Zhao stated:
“I won, but the case was very damaging. First, Sequoia took out an injunction against me which prevented me from raising finance for Binance at the end of 2017 which was a critical time in the market and when there was huge interest in Binance from other VCs and investors.”
Zhao stated previously that he was unable to publicly defend himself because of the confidentiality of the arbitration. Also, Sequoia paid about $2.4 million in legal fees for their part and lost the case. Zhao on the other hand as the best cryptocurrency news report had to pay up to 779,043 for more than a year to cover his legal expenses. He stated:
“For most entrepreneurs, they will not be able to: front USD 779,000 to fight a lawsuit; secure additional funding for their startup given a pending lawsuit, even one that’s clearly without proper base and where the claimant will surely lose.’’
Zhao concluded that there is a weakness in the legal system and unprofessional behavior by the VC giant. He noted that such companies should help entrepreneurs and startups. Luckily, there are many entrepreneurs today that offer better options such as blockchain based fundraising as he pointed out.
Sequoia did not comment but as we know the company sued Zhao’s company over a funding deal. The court filings show that there was a negotiation on investment between CZ and Sequoia since August 2017 which should have given the VC giant 11$ stake of the company. Zhao denied these allegations at that time.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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