Binance Sues RedotPay Over $473 Million in Alleged User Losses From Unauthorized Card Diversion
Binance-affiliated companies have initiated a lawsuit against RedotPay co-founders, alleging the payments platform unlawfully diverted over 470,000 Binance Card users through stablecoin payment card mechanisms, resulting in damages claims exceeding $473 million.
The Legal Petition and Core Allegations
Three Binance-affiliated entities—Nest Trading, DistributedTechnologies, and Chaintecs Consulting Singapore—have filed a legal petition in Hong Kong court against RedotPay co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao. According to a Hong Kong court filing obtained by Bloomberg and reported by Cointelegraph, Binance alleges that RedotPay, a Hong Kong-based cryptocurrency payments company, unlawfully permitted more than 470,000 Binance Card users to fund RedotPay stablecoin payment cards through Binance Pay mechanisms. Binance contends that this conduct violated the boundaries of their existing commercial agreement and redirected user access outside the authorized scope of their partnership, representing a substantial breach of contractual obligation.
Scale of Damages and Strategic Implications
Binance is seeking damages totaling nearly $473 million, derived from an estimated lifetime customer value of $925 per diverted user. The plaintiffs argue that RedotPay’s diversion strategy directly harmed Binance’s card product revenue while simultaneously inflating RedotPay’s valuation—a concern of particular significance as the payments company is reportedly considering pursuing an initial public offering. The timing compounds pressure on RedotPay, as ongoing legal exposure and operational uncertainty may complicate its IPO prospects. Beyond the Hong Kong litigation, Chaintecs has separately filed a related lawsuit in Singapore, with proceedings scheduled to commence Friday. This multi-jurisdictional approach signals Binance’s determination to pursue legal remedies across multiple regulatory territories where both companies operate.
Company Responses and Broader Market Context
RedotPay has issued a public statement asserting confidence in its legal position, vowing to defend vigorously against the allegations while maintaining that court proceedings will not disrupt normal business operations. The company declined further comment, citing the active legal status of the matter. Binance provided a measured response through a company spokesperson, noting that while it generally refrains from discussing active litigation, it remains prepared to pursue legal channels when necessary to safeguard its interests.
This lawsuit underscores intensifying competition within cryptocurrency payments infrastructure. As major platforms expand their stablecoin offerings and card products, disputes over user relationships and commercial boundaries are becoming increasingly common. The multi-jurisdictional scale and substantial financial stakes suggest this litigation may establish important legal precedents regarding user access rights and partnership boundaries between major crypto companies. The case will help define competitive practices in cryptocurrency payments infrastructure as the sector matures.
Source: Hong Kong Court, via Cointelegraph. Not financial advice.