Binance Sues RedotPay Founders Over Alleged User Diversion Scheme

The Allegations

Three Binance-affiliated entities have filed suit in Hong Kong against RedotPay co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao, claiming the executives orchestrated a scheme to redirect Binance customers to RedotPay's competing payment card. Nest Trading, DistributedTechnologies, and Chaintecs Consulting Singapore filed the petition alleging breach of a 2025 partnership agreement.

The complaint centers on customer value. Binance calculates the lifetime value of each diverted user at $925, resulting in a claimed loss of $472.8 million from the migration of more than 470,000 customers from Binance Card to RedotPay Card. Combined with additional damages, the suit seeks nearly $605 million.

According to Binance, RedotPay allowed users to top up RedotPay stablecoin payment cards using Binance Pay funds, a practice explicitly prohibited under their partnership terms. Binance discovered the arrangement in March 2026 and alleges RedotPay failed to segregate Binance Pay funds from its own card operations.

Partnership History

The relationship between the two companies began in November 2023, when RedotPay first signed an agreement with a Binance affiliate. That initial arrangement collapsed within six months over disputes about fund usage. In March 2025, they negotiated a revised agreement with explicit provisions requiring separation of Binance funds.

Under the revised terms, Binance customers could use RedotPay's platform for crypto-to-fiat exchanges, in-app transfers, and purchases of RedotPay-branded goods. Direct deposits from Binance Pay to RedotPay Card were not authorized.

Binance alleges that despite these restrictions, RedotPay processed approximately $304 million in user funds from Binance Pay for unauthorized card top-ups. The exchange argues this arrangement allowed RedotPay to artificially inflate its user base and valuation ahead of planned fundraising and public listing efforts.

RedotPay's Response

RedotPay rejected the claims and stated it would mount a vigorous defense. A company spokesperson said the proceedings have no impact on daily operations. After the suit became public, RedotPay posted a message to users and partners reiterating that business would continue uninterrupted and noting record on-chain spending from users in the previous month.

The startup has not addressed specific allegations about fund segregation or customer diversion in its public statements.

Valuation at Stake

The lawsuit arrives at a delicate moment for RedotPay. Founded in 2023, the Hong Kong-based company has emerged as one of Asia's fastest-growing crypto payments platforms, offering Visa-network debit cards that can be topped up with stablecoins for spending at traditional retailers and online merchants.

RedotPay achieved a $1 billion valuation in late 2025 and has been exploring an initial public offering at a potential $4 billion valuation. The company reports annualized payment volumes of $14 billion, annualized revenue of $180 million, and more than 8 million users. In December, its annualized total payment volume surpassed $10 billion, doubling year-over-year, while revenues also doubled to $158 million.

Binance contends that the channeling of its customers was a material factor in RedotPay's valuation trajectory. In 2024 Series A pitch materials, RedotPay highlighted its Binance partnership as a driver of user adoption and specifically mentioned direct deposits from Binance Pay to RedotPay Card as a feature.

Investor Backing and Executive Turnover

RedotPay has attracted funding from prominent venture firms including Accel, Blockchain Capital, Circle Ventures, Coinbase Ventures, and Galaxy Ventures. The investor interest reflects broader enthusiasm for crypto payments infrastructure in Asia, where regulatory frameworks in jurisdictions like Hong Kong and Singapore have become more accommodating.

However, the company has experienced significant executive churn. At least five senior hires have departed within 12 months of joining. Jonathan Tsang, who served as head of legal since 2024, stepped down effective July 21. He declined to comment on his departure, and RedotPay did not respond to questions about the turnover.

Parallel Singapore Proceedings

In addition to the Hong Kong case, Binance's Chaintecs entity filed a separate suit against RedotPay affiliates in Singapore. A hearing in that matter was scheduled for August 7. The dual-jurisdiction approach suggests Binance is pursuing remedies across multiple regulatory frameworks where both companies operate.

Binance Pay, the payment service at the center of the dispute, has processed more than $280 billion in transactions since launching in 2021. Binance Card, a Mastercard-branded debit card, allows users to spend directly from crypto wallets at participating merchants.

A Binance spokesperson declined to comment on ongoing litigation but said the company would pursue appropriate legal remedies when necessary.

Asia's Crypto Payments Race

The dispute underscores tensions in Asia's competitive crypto payments landscape, where platforms are racing to convert digital asset holders into everyday spenders. Stablecoin-funded debit cards have become a key battleground, offering a bridge between crypto holdings and traditional commerce infrastructure.

Partnership agreements between exchanges and payment processors are critical to scaling these services, providing exchanges with merchant acceptance networks and giving payment firms access to large user bases. When those partnerships fracture, the resulting litigation can expose the economics and competitive dynamics of the sector.

RedotPay's trajectory from startup to unicorn in under three years reflects the velocity of capital and user growth in Asian crypto markets. Whether that growth relied on authorized partnerships or improper customer diversion will now be decided in Hong Kong and Singapore courts.