Zhao Changpeng sues Sequoia Capital for defamation and demands compensation

After a Sequoia Capital investor's lawsuit against Binance founder and CEO Zhao Changpeng was dismissed, Zhao Changpeng launched his own counterattack, claiming that Sequoia Capital China damaged his reputation and prevented him from raising funds at a favorable company valuation, and demanded compensation from the venture capital firm.
According to a document submitted to the Hong Kong High Court on May 20, Zhao Changpeng has applied to the court through his lawyers for an immediate assessment of the damages he received. On the website of the Hong Kong High Court, we can see that the lawsuit will be heard on June 25. The two parties involved are Zhao Changpeng and SCC Venture VI, a company established by a special purpose vehicle under Sequoia Capital China.
In his lawsuit, Zhao Changpeng asked the court to initiate an investigation to determine whether and what damages he suffered as a result of the injunction obtained by Sequoia Capital on December 27, 2017, which prevented Zhao Changpeng from raising funds from other investors until March 1, 2018.
If the court determines that Zhao Changpeng continues to be affected by the relevant "damages", then according to Zhao Changpeng's request, he needs Sequoia Capital to pay the funds lost during the investigation (Zhao Changpeng did not disclose the specific amount of the claim).
In the latest lawsuit filed, Zhao Changpeng stated:

“I am entitled to reasonable damages from Sequoia Capital for the losses I have suffered as a result of the injunction, particularly for the fact that I have experienced 1) a reduction in my opportunities to raise capital through successive rounds of financing at increasingly high valuations, and 2) damage to my reputation.”

As of the time of writing, Sequoia Capital China has not responded to this matter.
In December 2018, the Hong Kong International Arbitration Center made a decision to dismiss all claims by Sequoia Capital that the latter violated the exclusivity agreement during its Series A equity financing with Binance. Now, Zhao Changpeng has begun to fight back against Sequoia Capital.

'Abuse of process'

In December 2017, Sequoia Capital obtained an injunction unilaterally (or through a unilateral process) without notifying Zhao Changpeng, claiming that Zhao Changpeng had violated the exclusivity agreement by contacting other investment institutions such as IDG Capital during Sequoia Capital's Series A equity financing negotiations with Binance. Subsequently, in January 2018, it filed an arbitration notice as the applicant.
Three months later, at a hearing on April 11, a deputy judge of the Hong Kong High Court ruled in a judgment that Sequoia Capital was wrong to unilaterally apply for arbitration without notifying Zhao Changpeng, and that Sequoia Capital had no explanation or evidence as to why it had not made any effort to involve both parties.
The judge stated:

“I agree that the use of an ex parte process without notice to defendant Zhao Changpeng was an abuse of process and I would have set it aside on that basis if the injunction had not already been completed.”

In the following months of 2018, the two parties went to arbitration again and submitted various evidence to the three-member panel of the Hong Kong International Arbitration Center. According to the final decision made on December 14, 2018, the court dismissed Sequoia Capital’s claim that Zhao Changpeng violated the exclusivity of the investment transaction because Zhao Changpeng’s contact with IDG Capital was actually for the Series B financing transaction.
The court stated in its judgment:

“The tribunal held that Zhao Changpeng’s negotiations with IDG were not for a ‘competing transaction’ with the Series A round, but rather for a proposed Series B round, which was not in competition with the Series A round and did not become a Series A round.” (CoinDesk)