Binance Sues RedotPay Over Alleged Diverting of Customers
Binance has filed a lawsuit against Hong Kong-based crypto payments firm RedotPay, alleging that its founders diverted hundreds of thousands of customers to a competing product in a 'fraudulent scheme', resulting in nearly half a billion dollars in losses. The suit claims that Binance affiliates Nest Trading, DistributedTechnologies and Chaintecs Consulting Singapore Pte filed a petition in Hong Kong against RedotPay co-founders Gao Zhangpeng, Chan Wa Choi and Yao Chao for violating the terms of an agreement signed last year.
The original agreement between Binance and RedotPay was meant to benefit both companies. RedotPay would gain access to users of the world's largest crypto exchange, while Binance's payment services were made available across a broader network. However, Binance alleges that its users were allowed to top up a RedotPay stablecoin payment card outside the scope of their agreement.
RedotPay has been considering an initial public offering at a potential $4 billion valuation and has been trying to raise fresh funds amid churn in senior executives. Binance is now alleging that channelling more than 470,000 customers away from Binance Card to RedotPay was a contributing factor to RedotPay's valuation.