On August 5, 2026, Binance-affiliated companies filed a lawsuit seeking around $473 million or more against Hong Kong-based stablecoin payments firm RedotPay. The lawsuit alleges that RedotPay breached a commercial agreement by diverting users from Binance Card.
Key Takeaways
- RedotPay allegedly diverted more than 470,000 users from Binance Card to its own payment cards using Binance Pay.
- Plaintiffs calculated the damages based on a $925 lifetime customer value for each diverted user.
- The dispute follows Binance’s decision to end Binance Pay support on the RedotPay platform from April 3, 2026.
- Before the lawsuit, RedotPay was planning a US IPO that could value the business above $4 billion.
- The legal action coincides with Binance reporting a registered user base of 323 million in the first half of 2026.
What Happened?
Binance-affiliated companies including Nest Trading, Distributed Technologies Ltd., and Chaintecs Consulting Singapore brought the case against RedotPay’s co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao. The core of the dispute centers on allegations that the stablecoin payments firm allowed users to fund its payment cards through Binance Pay outside the terms of an existing commercial agreement.
Chaintecs has also brought a related case in Singapore, extending the legal pressure across multiple jurisdictions. The dispute escalated months after Binance ended its support for the payments firm. Binance previously confirmed that its Binance Pay features on the RedotPay platform were discontinued as part of a review of merchant partners.
Binance Sues Largest Crypto Card Company RedotPay, Alleges User Diversion and Seeks $472.8 Million
— Wu Blockchain (@WuBlockchain) August 5, 2026
According to Bloomberg, Binance-affiliated entities Nest Trading, DistributedTechnologies and Chaintecs Consulting Singapore filed a lawsuit in Hong Kong against RedotPay… pic.twitter.com/o9MFy7zkEE
The Mechanics of the Dispute
The lawsuit highlights the financial impact of user retention in crypto payment integrations. The plaintiffs are seeking around $473 million or more in damages, asserting that the diverted volume fundamentally violated their terms.
By utilizing a rigid per-user lifetime customer value metric to calculate damages, the exchange is emphasizing its strategy for retaining retail payment volume among crypto exchange customers. Maintaining control over user acquisition remains essential for scaling proprietary ecosystems, especially as they integrate with retail-facing applications.
Disruption to RedotPay’s Expansion Plans
The lawsuit arrives during a critical growth phase for the Hong Kong-based startup. Prior to the legal action, RedotPay was actively expanding its presence in crypto payments and was in talks to raise as much as $150 million. The firm recorded significant growth over the past year, as its annualized total payment volume crossed $10 billion in December 2025.
During the same period, its full-year total payment volume increased 300% year over year.
The startup was targeting a US IPO, working with JPMorgan Chase, Goldman Sachs and Jefferies Financial Group on a potential New York listing. The firm previously raised $194 million in two funding rounds back in September and December 2025. These rounds were backed by investors including Coinbase Ventures, Circle Ventures and Blockchain Capital. Just as SEC and CFTC regulations data shows regional startups competing fiercely for institutional backing, this legal challenge complicates RedotPay’s near-term valuation prospects.
Binance’s Broader Ecosystem Growth
Despite the legal friction with merchant partners, Binance’s core infrastructure continues to scale. In July, the exchange reported its registered user base had climbed across more than 100 countries. This marked an over 7% increase in the first half of 2026.
Institutional adoption also trended upward, with institutional users surging by 9% during the same period. The exchange’s cumulative trading volume reached $156 trillion after adding $11.4 trillion in the first six months.
Beyond the core crypto market, the company’s traditional finance products have generated more than $80 billion in monthly trading volume since March. The firm’s stock trading service, launched in June, crossed $1 billion in assets under management within a month.
CoinLaw’s Takeaway
This $473 million lawsuit highlights the friction that emerges when external payment providers build directly on top of incumbent exchange infrastructure. The strategic decision signals that dominant exchanges intend to aggressively defend their retail payment channels from unauthorized disintermediation. The dispute also demonstrates the vulnerabilities inherent in building a core product around an external API dependency without explicit commercial alignment, which can expose merchant platforms to sudden disintermediation risk.
For the broader digital asset sector, this legal action establishes a clear boundary for infrastructure partnerships. While decentralized adoption operates on distinct models, integrated merchant platforms will likely face increased scrutiny over how they route user funds and capture value.
