<\/p>\n
Binance affiliates are suing the founders of Hong Kong-based crypto payments firm RedotPay for allegedly diverting hundreds of thousands of customers to a competing product in a \u201cfraudulent scheme,\u201d claiming nearly half a billion dollars in losses.<\/p>\n
The Binance Holdings-affiliated entities Nest Trading, DistributedTechnologies and Chaintecs Consulting Singapore Pte filed a petition in Hong Kong alleging that RedotPay co-founders Gao Zhangpeng, Chan Wa Choi and Yao Chao violated the terms of an agreement signed last year, according to a court document obtained by Bloomberg News on Tuesday.<\/p>\n
The original agreement was meant to benefit both companies: RedotPay got access to users of the world\u2019s largest crypto exchange, while Binance\u2019s payment services were made available across a broader network. However, Binance alleges that its users were allowed to top up a RedotPay stablecoin payment card, outside the scope of their agreement.<\/p>\n
The lawsuit comes at a critical time for RedotPay. The company has been considering an initial public offering at a potential $4 billion valuation, Bloomberg previously reported. It has also been trying to raise fresh funds amid churn in senior executives.<\/p>\n
Binance is now alleging that channelling more than 470 000 customers away from Binance Card to RedotPay was a contributing factor to RedotPay\u2019s valuation. Estimating the lifetime value per customer at $925, Binance is claiming $472.8 million in losses.<\/p>\n
\u201cSince March 2026, the Binance Group has discovered that RedotPay Group had been allowing and encouraging Binance Pay funds to be used, without segregation, for the prohibited use within RedotPay, including card top-ups for RedotPay Card,\u201d Binance said in the filing.<\/p>\n
RedotPay rejected the allegations, saying the company would \u201crespond through the appropriate legal process.\u201d<\/p>\n
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\u201cRedotPay is aware of legal proceedings initiated by Binance and will vigorously defend all claims,\u201d a company spokesperson said. \u201cThese proceedings have no impact on RedotPay\u2019s day-to-day operations.\u201d<\/p>\n
A Binance spokesperson said that while it doesn\u2019t comment on ongoing litigation, \u201cwhere necessary we will use courts and other forums to pursue what is right.\u201d<\/p>\n<\/p>\n
Founded in 2023, RedotPay has become one of Asia\u2019s fastest growing crypto payments firms. Its virtual and physical crypto debit cards on the Visa network can be topped up with stablecoins \u2014 cryptocurrencies pegged to an established asset like the US dollar \u2014 allowing users to spend their crypto at everyday retailers and online vendors.<\/p>\n
RedotPay first struck an agreement with a Binance affiliate in November 2023, according to the filing. That agreement fell apart in less than six months on allegations that Binance Pay funds were used to fund prepaid RedotPay Cards. In March 2025, they struck a new agreement with assurances that Binance funds would be kept separate, according to the document.<\/p>\n
Under the agreement, Binance customers could use funds on RedotPay to exchange crypto for fiat currency, for in-app transfers or to purchase RedotPay-branded goods.<\/p>\n
RedotPay has long touted its Binance alliance to potential venture backers. In 2024 pitch materials for its Series A fundraising efforts seen by Bloomberg, it referenced its Binance partnership as a way to \u201caccelerate user adoption.\u201d It specifically mentioned that users could make direct deposits to RedotPay Card from Binance Pay.<\/p>\n
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Binance alleged that the tie-up helped RedotPay receive about $304 million in user funds from Binance Pay.<\/p>\n
Binance Pay has processed more than $280 billion in transactions since its launch in 2021, according to a report published in January 2026. Binance Card, a Mastercard-branded debit card, allows users to spend from their crypto wallets at participating merchants, according to the company.<\/p>\n
RedotPay has attracted funding from a slew of venture firms, including Accel, Blockchain Capital, Circle Ventures, Coinbase Ventures and Galaxy Ventures. It secured a billion-dollar valuation in late 2025, with eyes on a US public listing possibly as soon as this year.<\/p>\n
RedotPay\u2019s annualised total payment volume surpassed $10 billion in December, doubling from a year earlier, while revenues also doubled to $158 million, according to separate investor materials reviewed by Bloomberg. The company said it currently has $14 billion in annualised payment volumes, $180 million in annualised revenue and more than 8 million users.<\/p>\n
While growing rapidly, RedotPay has also experienced high executive turnover. Bloomberg reported previously that at least five senior hires had lasted less than 12 months. Jonathan Tsang, head of legal at the startup since 2024, said in a recent post on LinkedIn that he had stepped down effective July 21. He declined to comment on his departure, and RedotPay didn\u2019t respond to a question about it.<\/p>\n
In addition to Hong Kong, Binance\u2019s Chaintecs has also filed a suit against RedotPay affiliates in Singapore. A hearing is set for Friday.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Binance #RedotPay #diverted #users #470m #lawsuit<\/p>\n","protected":false},"excerpt":{"rendered":"
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