CZ on his legal battles with Sequoia: "We fight for our industry"

23 May, 2019 | Updated: 23 May, 2019
by Richard Allen
Update
CZ on his legal battles with Sequoia: We fight for our industry

News recently broke regarding Binance chief executive Changpeng Zhao’s lawsuit against Sequoia Capital. CZ has taken to Twitter to share his side of the story.

CZ explains Sequoia took out an injunction against him, accusing him of breaching exclusivity which prevented him from raising funds for Binance at the end of 2017, a time he describes as “critical” because “there was huge interest in Binance from other VCs and investors.”

He goes on, stating the injunction and Sequoia’s allegations against him were serious and made public, but because the arbitration was confidential, CZ was unable to defend himself. The Hong Kong court later determined that Sequoia’s actions in obtaining the injunction were an abuse of process. As such, the arbitration tribunal determined late last year that all of Sequoia’s claims were without merit.

CZ explains he had to front $779,043 for over a year to cover all his legal fees. While Sequoia later covered those expenses because they lost, many entrepreneurs would be unable to pay that much money to fight a lawsuit. Additionally, given the huge distraction an ongoing lawsuit presents, many entrepreneurs would have no choice but to give in to unfair terms.

Furthermore, even after winning, CZ was unable to go public with the results, despite the fact that when he was sued it was made public immediately. He had to counter-sue to make the results public.

He concludes by saying “We don’t just play defense. We fight for our industry.”

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