Binance Affiliates Seek $473M From RedotPay Founders
Binance affiliates are seeking $472.8 million from RedotPay’s founders, alleging the company diverted more than 470,000 users through unauthorized Binance Pay-funded card top-ups.
Key Takeaways:
- Binance-linked companies filed a $472.8 million claim against RedotPay’s three co-founders.
- The plaintiffs allege more than 470,000 Binance users were diverted to RedotPay cards.
- Roughly $304 million allegedly moved through card top-ups funded by Binance Pay.
- RedotPay rejects the claims and says its operations remain unaffected.
According to Bloomberg, Binance-affiliated companies have sued the three co-founders of Hong Kong stablecoin payments firm RedotPay, seeking $472.8 million over allegations that the company breached a commercial agreement and redirected more than 470,000 Binance users toward its own card product. The dispute matters beyond the size of the claim because it tests how crypto exchanges can control customer access, payment routing and data when they open their infrastructure to outside fintech partners.
The dispute centers on prohibited card top-ups
The Hong Kong case was brought by Binance-linked entities Nest Trading, Distributed Technologies and Chaintecs Consulting Singapore against RedotPay co-founders Gao Zhangpeng, Chan Wa Choi and Yao Chao, according to reports citing the court filing.
At the center of the complaint is a narrow payment-routing question. Binance alleges that RedotPay allowed users to fund RedotPay prepaid cards directly with assets held in Binance Pay, even though the parties’ agreement permitted only selected uses of Binance’s payment infrastructure.
Under the March 2025 agreement described in the filing, Binance customers could reportedly use Binance Pay funds for crypto-to-fiat conversion, transfers within RedotPay and purchases of RedotPay-branded products. Direct top-ups of RedotPay cards were excluded, and the contract required Binance-related funds to remain segregated from the card business.
Binance claims it discovered in March 2026 that the prohibited route was still operating. It terminated Binance Pay support on RedotPay effective April 3 as part of what it publicly described as a review of merchant partnerships.
| Claimed metric | Reported figure | How it is used in the case |
|---|---|---|
| Users allegedly diverted | More than 470,000 | Basis for the claimed loss of customer relationships |
| Funds routed to cards | Approximately $304 million | Value allegedly processed through the disputed top-up channel |
| Claimed value per user | $925 | Plaintiffs’ estimate of lifetime customer value |
| Total damages sought | $472.8 million | Aggregate claim that has not yet been tested in court |
The $472.8 million figure is therefore not a direct measure of the $304 million allegedly processed through the channel. The plaintiffs calculated damages largely by assigning a lifetime value of $925 to each customer they say was diverted from Binance’s card ecosystem.
That methodology will likely become one of the most contested parts of the case. A court would need to assess whether the users were genuinely lost to Binance, whether they would otherwise have remained active customers and whether $925 reasonably reflects the profit Binance expected to earn from each relationship.
Why customer diversion can be more valuable than transaction volume
Crypto payment partnerships often look like straightforward integrations, but control over the user relationship carries substantial economic value.
A payment provider that gains access to an exchange’s customers can earn interchange revenue, conversion fees and spreads while building transaction histories that improve retention and future product sales. Once a user adopts a separate card and mobile application, the exchange may lose visibility over everyday spending activity even if the customer keeps a trading account open.
This helps explain why Binance’s claim focuses on estimated lifetime customer value rather than only the money that moved through RedotPay cards. The alleged harm is not simply that $304 million passed through an unauthorized route. Binance argues that the route helped a partner establish direct relationships with users originally acquired through its own platform.
The case also raises a difficult question about attribution. A customer can use both Binance and RedotPay without fully leaving either service. Proving that RedotPay caused a permanent diversion rather than adding another payment option may require detailed evidence on account activity, card usage and the commercial performance of Binance Card.
The partnership had already failed once over similar concerns
The March 2025 agreement was reportedly not the first commercial arrangement between the companies.
Binance and RedotPay initially entered a partnership in November 2023, but that relationship ended within six months after concerns that Binance Pay balances were being used to fund RedotPay cards. The parties later reached a new agreement that included segregation requirements and more explicit restrictions on card top-ups.
The earlier dispute could become relevant if Binance argues that RedotPay’s founders understood the restrictions before entering the replacement contract. RedotPay may instead challenge Binance’s interpretation of the agreements, the technical operation of the funding route or the link between those transactions and the claimed customer losses.
| Period | Development | Why it matters |
|---|---|---|
| November 2023 | Binance and RedotPay begin their first commercial relationship. | Gives RedotPay access to Binance’s payment infrastructure and users. |
| 2024 | The initial relationship ends after concerns over card funding. | Establishes the background to the later segregation rules. |
| March 2025 | The parties sign a replacement agreement. | Limits approved uses and reportedly prohibits direct card top-ups. |
| April 3, 2026 | Binance Pay support on RedotPay is discontinued. | Closes the disputed funding route before the lawsuit. |
| August 2026 | Binance affiliates seek $472.8 million in Hong Kong. | Moves the commercial dispute into formal litigation. |
RedotPay denies the allegations as IPO plans raise the stakes
RedotPay said it would defend itself vigorously and rejected the allegations against the company and its co-founders. It also stated that the proceedings were not affecting day-to-day operations.
The litigation arrives while RedotPay is considering a U.S. initial public offering that could raise more than $1 billion and value the company at over $4 billion, according to reports citing people familiar with the plans.
That timing increases the commercial significance of the dispute. Prospective investors would need to evaluate not only the potential damages but also whether the allegations expose weaknesses in RedotPay’s partnership controls, revenue attribution or compliance systems.
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RedotPay has expanded rapidly. The company raised $107 million in a Series B round in late 2025, bringing the capital raised that year to $194 million, while reporting more than 6 million users and over $10 billion in annualized payment volume.
A large customer-diversion claim could complicate the disclosure process for an IPO even without an adverse judgment. Underwriters and investors may seek greater detail on the disputed revenue, the company’s dependence on exchange integrations and any restrictions that partners could impose on future funding routes.
The case could reshape crypto payment partnerships
The dispute highlights the tension between exchanges and payment companies that depend on one another but compete for the same customers.
Exchanges want outside applications to increase the usefulness of account balances. Payment firms need access to liquidity and large user bases. Once an integration becomes successful, however, the payment provider may control more of the customer’s daily activity than the exchange supplying the funds.
Future contracts may respond by imposing stricter technical controls rather than relying only on written restrictions. Exchanges could require transaction-level segregation, approved merchant codes, automated blocking of prohibited card funding and audit access to partner systems.
Payment firms may also demand clearer rules on customer ownership. A user who independently registers for a card after seeing it inside an exchange application may not fit neatly into one company’s customer-acquisition model.
What changes next for Binance, RedotPay and users
The Hong Kong litigation will need to establish whether the disputed top-ups breached the replacement agreement and whether the founders can be held personally responsible for the alleged scheme.
A related case filed by Chaintecs against RedotPay affiliates in Singapore adds a second legal front. The first hearing was scheduled for August 7, potentially providing an early indication of how aggressively the Binance-linked entities will pursue interim orders or evidence across jurisdictions.
For users, the immediate operational change has already occurred because Binance Pay support on RedotPay ended in April. The more consequential next step will be the disclosure of contractual documents, technical payment records and customer activity data, which could clarify whether the $304 million represented prohibited card funding and how Binance arrived at its $925 valuation for each allegedly diverted user.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
