Binance Sues RedotPay Over Alleged Theft of 470,000 Users

Binance affiliated entities have filed a formal legal petition in Hong Kong against the founders of payment startup RedotPay. The lawsuit alleges that RedotPay used its partnership with Binance to siphon more than 470,000 Binance Card customers into its own competing stablecoin card product. Binance claims financial losses totaling roughly $472.8 million, based on an estimated customer lifetime value, and states that RedotPay received about $304 million in user funds routed through Binance Pay.

RedotPay has denied all allegations and stated that the ongoing legal battle will not impact its daily operations. The startup currently claims to serve over 8 million users with a massive annualized payment volume of $14 billion, leading to reports that the company is considering an initial public offering at a valuation above $4 billion.

This dispute highlights a growing friction across the crypto industry regarding who owns the relationship with the end user. Payment apps and wallets capture valuable transaction data, conversion fees, and daily engagement that legacy exchanges want to retain. As major players like Visa, Mastercard, and Stripe push deeper into stablecoin infrastructure, competition for user balances will only intensify.

Traders and observers should watch how this lawsuit progresses through the Hong Kong courts, as it could set a major legal precedent for partnerships between large exchanges and smaller crypto payment startups.