Binance Sues RedotPay Over Alleged Misuse of User Funds Ahead of US IPO

RedotPay, the leading provider of crypto payment cards in China, is facing a lawsuit from Binance over alleged breaches of agreement. The dispute centers around RedotPay's handling of user funds and customer acquisition.

Binance claims that RedotPay's co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao directed over 470,000 users to their platform after partnering with Binance Pay in November 2023. The lawsuit seeks $472.8 million in damages, consisting of $304 million in user funds allegedly misused by RedotPay and commercial losses incurred due to customer attrition.

RedotPay has responded that the lawsuit will not affect its operations and that it will vigorously defend against all allegations. Despite this, the timing of the lawsuit is concerning for the company as it prepares for a potential $1 billion US IPO in New York, with a target valuation of over $4 billion.

RedotPay has consistently held the top position in the crypto U-Card market since 2024, with an annual payment volume of $14 billion and annualized revenue of approximately $180 million. The company's early growth came from its partnership with Binance Pay, which allowed users to directly use funds from their Binance accounts to top up their RedotPay Cards.