A significant legal storm has erupted in the cryptocurrency payments sector, as crypto giant Binance has filed a substantial lawsuit against RedotPay, an entity that positions itself as the world’s largest issuer of stablecoin payment cards. Binance alleges that RedotPay maliciously diverted nearly half a million users and misused funds, seeking a staggering $470 million in damages.
In response, RedotPay, which is reportedly actively preparing for an Initial Public Offering (IPO), has acknowledged the legal action initiated by Binance. The company vehemently denies the accusations, labeling them as “baseless,” and has pledged to “fully defend” itself and its founders against the claims.
Binance’s Core Allegations: User Diversion and Fund Misappropriation
According to a report by Bloomberg, multiple Binance-affiliated entities have jointly filed a complaint against Hong Kong-based RedotPay and its co-founders. The lawsuit claims that RedotPay violated a cooperation agreement by redirecting approximately 470,000 Binance users to its own platform, resulting in estimated losses of $473 million for Binance.
The heart of Binance’s complaint, as detailed in the court filing, points to an alleged egregious violation of financial protocols. “Beginning in March 2026, the Binance Group discovered that the RedotPay Group failed to implement proper fund segregation. Instead, RedotPay condoned and actively encouraged users to misappropriate funds from ‘Binance Pay’ for non-compliant projects on the RedotPay platform, including the unauthorized top-up of RedotPay’s own physical payment cards,” the complaint states.
A Binance spokesperson, speaking to CoinDesk, offered a cautious but firm statement: “While we do not comment on ongoing litigation, Binance will absolutely defend its legitimate rights and interests through proper legal channels when necessary.”
Multiple Legal Fronts and a Troubled Partnership Timeline
The legal battle extends beyond the initial filing. Binance’s affiliate, Chaintecs, has also initiated separate proceedings against RedotPay’s associated entities in Singapore. Court documents from the Singapore judiciary confirm that a hearing for this lawsuit is scheduled for Friday, underscoring the multi-jurisdictional nature of the dispute.
The Genesis and Demise of a Collaboration
Court documents obtained by Bloomberg shed light on the tumultuous history between the two companies:
- November 2023: Binance and RedotPay first established a commercial partnership. However, this initial collaboration quickly soured, collapsing in less than six months. The breakdown was reportedly triggered by Binance’s discovery that Binance Pay funds were being improperly used to top up RedotPay prepaid cards.
- March 2025: In an attempt at reconciliation, both parties signed a second cooperation agreement. This revised pact explicitly stipulated that Binance funds must be segregated and used for specific, approved purposes. The agreement permitted Binance users to leverage Binance Pay via RedotPay for cryptocurrency-to-fiat conversions, in-app transfers, and the purchase of RedotPay-branded merchandise. Crucially, it strictly prohibited the use of Binance Pay funds for topping up RedotPay’s own cards, indicating a direct attempt to address the prior breach.
This partnership was strategically beneficial for RedotPay, granting it access to Binance’s vast user base and integrating Binance Pay into its payment network. Despite the renewed agreement, Binance ultimately terminated the partnership in April 2026. At the time, Binance only stated that the decision was part of its “regular review of merchant partners,” without providing further details on the underlying reasons – reasons that are now coming to light through the ongoing litigation.
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