By The Straits Times | Created at 2026-08-06 03:36:45 | Updated at 2026-08-06 09:50:22
6 hours ago
HONG KONG - 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 “fraudulent scheme”, claiming nearly half a billion dollars in losses.
The Binance Holdings-affiliated entities Nest Trading Ltd., DistributedTechnologies Ltd 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 in 2025, according to a court document obtained by Bloomberg News on Aug 4.
The original agreement was meant to benefit both companies: RedotPay got access to users of the world’s largest crypto exchange, while Binance’s 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.
The lawsuit comes at a critical time for RedotPay. The company has been considering an initial public offering at a potential US$4 billion valuation, Bloomberg previously reported.
It has also been trying to raise fresh funds amid churn in senior executives.
Binance is now alleging that channeling more than 470,000 customers away from Binance Card to RedotPay was a contributing factor to RedotPay’s valuation.
Estimating the lifetime value per customer at US$925, Binance is claiming US$472.8 million (S$605 million) in losses.
“Since 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,” Binance said in the filing.
RedotPay rejected the allegations, saying the company would “respond through the appropriate legal process”.
“RedotPay is aware of legal proceedings initiated by Binance and will vigorously defend all claims,” a company spokesperson said. “These proceedings have no impact on RedotPay’s day-to-day operations.”
After this story was published on Aug 5, RedotPay reiterated to users and partners in a post on its website that the proceedings would not affect future operations.
It saw record on-chain spending from users in the past month, it said.
A Binance spokesperson said that while it does not comment on ongoing litigation, “where necessary we will use courts and other forums to pursue what is right”.
Founded in 2023, RedotPay has become one of Asia’s fastest growing crypto payments firms.
Its virtual and physical crypto debit cards on the Visa network can be topped up with stablecoins – cryptocurrencies pegged to an established asset like the US dollar – allowing users to spend their crypto at everyday retailers and online vendors.
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.
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.
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 “accelerate user adoption”.
It specifically mentioned that users could make direct deposits to RedotPay Card from Binance Pay.
Binance alleged that the tie-up helped RedotPay receive about US$304 million in user funds from Binance Pay.
Binance Pay has processed more than US$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.
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 in 2026.
RedotPay’s annualised total payment volume surpassed US$10 billion in December, doubling from a year earlier, while revenues also doubled to US$158 million, according to separate investor materials reviewed by Bloomberg.
The company said it currently has US$14 billion in annualised payment volumes, US$180 million in annualized revenue and more than 8 million users.
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 did not respond to a question about it.
In addition to Hong Kong, Binance’s Chaintecs has also filed a suit against RedotPay affiliates in Singapore. A hearing is set for Aug 7. BLOOMBERG
