Binance vs Redotpay lawsuit: Alleged fraud, customer diversion to rival product, claim over $470 million loss—10 points

Binance Holdings’ affiliates have filed a lawsuit against the founders of Hong Kong-based crypto payments firm RedotPay for alleged fraud, accusing them of diverting hundreds of thousands of customers to a rival product, and claiming over $470 million in losses, Bloomberg reported today.

Binance in its filing claimed, “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.”

A Binance spokesperson said that while it doesn’t comment on ongoing litigation, “where necessary we will use courts and other forums to pursue what is right.”

RedotPay: Will ‘respond through legal process’

However, 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. These proceedings have no impact on RedotPay’s day-to-day operations,” a company spokesperson told Bloomberg.

After the news broke on 5 August, RedotPay, in a post on its website, told customers and partners that the proceedings would not affect future operations.

Binance vs Redotpay lawsuit: 10 key points

• The affiliates, Chaintecs Consulting Singapore Pte., DistributedTechnologies Ltd, and Nest Trading Ltd, have accused RedotPay’s co-founders Chan Wa Choi, Gao Zhangpeng, and Yao Chao of violating an agreement signed in 2025, the report said.
• The lawsuit has been filed in Hong Kong and comes at a “critical time” as RedotPay is considering a $4 billion worth initial public offering (IPO), while raising funds amid change in the executive roles, Bloomberg added.
• The report said the agreement benefitted both companies — Giving RedotPay access to the world’s largest crypto exchange, while in turn, Binance’s payments services were made available across a broader network.

• Notably, this agreement came after the first one signed in November 2023 fell apart in less than six months on allegations that Binance Pay funds were used to fund prepaid RedotPay Cards, as per the report,
• It added that the second agreement was signed in March 2025 with assurances that Binance funds would be kept separate, and that Binance customers could use funds on RedotPay to exchange crypto for fiat currency, for in-app transfers or to purchase RedotPay-branded goods, according to the filing document.
• The lawsuit claims that users were instead allowed to top up a RedotPay stablecoin payment card, outside the scope of their agreement, which allegedly channeled over 470,000 customers away from Binance Card to RedotPay.
• Estimating the lifetime value per customer at $925, Binance is claiming $472.8 million in losses.

• It alleged that the funneling of customers contributed to RedotPay’s valuation. The company has also touted its Binance alliance to potential venture backers, the report added.
• Notably, RedotPay’s In 2024 pitch materials for its Series A fundraising referenced its Binance partnership as a way to “accelerate user adoption” and mentions that users could make direct deposits to RedotPay Card from Binance Pay, as per the report.
• Binance has alleged that the tie-up helped RedotPay receive about $304 million in user funds from Binance Pay.

What do we know about both companies?

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, the report said.

It added that 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.

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.

RedotPay’s annualized 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 annualized payment volumes, $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 didn’t 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 Friday.

(With inputs from Bloomberg)