Binance Sues RedotPay Founders Over Alleged $473M Losses and User Diversion

Woofun AI reports that a commercial dispute has escalated into litigation in Hong Kong, with Binance-affiliated entities filing suit against the founders of cryptocurrency payments firm RedotPay. The plaintiffs, including Nest Trading, DistributedTechnologies, and Chaintecs Consulting Singapore, are pursuing legal action against co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao for alleged breaches of their commercial agreement.

Woofun AI data shows that the core of the financial claim rests on the allegation that RedotPay diverted more than 470,000 users from the Binance Card ecosystem. By allowing users to fund RedotPay stablecoin payment cards using Binance Pay outside the agreed scope, the defendants allegedly caused significant harm. Binance estimates the resulting damages at $472.8 million, calculated based on a lifetime customer value of $925 per user, totaling nearly $473 million in sought compensation.

Structurally, this legal maneuver coincides with RedotPay’s consideration of an initial public offering, with Bloomberg reporting on Wednesday that the conduct contributed to the company’s valuation. In a parallel development, Chaintecs Consulting Singapore filed a related lawsuit in Singapore, where a hearing is scheduled for Friday. These simultaneous actions suggest a coordinated strategy to address the alleged misconduct across multiple jurisdictions.

RedotPay has firmly denied the allegations, stating in a statement that the proceedings will not impact its operations. The company asserts it is vigorously defending all claims and will not comment further while the matter is before the court.

Meanwhile, a Binance spokesperson stated that while they do not comment on ongoing litigation, they will use courts to pursue what is right, marking a significant escalation in the regulatory landscape for crypto payment providers.