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
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.
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