Binance Sues RedotPay Founders for $473 Million Over User Diversion

Binance-linked companies filed suit against three RedotPay co-founders this week, seeking approximately $472.8 million in damages and alleging that the crypto card startup systematically diverted more than 470,000 Binance Card users to its own competing service in breach of a commercial agreement.

The complaint centers on two core allegations: that RedotPay used its position under a partnership arrangement with Binance to redirect Binance Card holders onto RedotPay's own card product, and that roughly $304 million moved from Binance Pay into RedotPay's platform in a manner Binance characterizes as misappropriation. Together, the claims frame this not as ordinary commercial competition but as deliberate exploitation of access granted under contract.

RedotPay is a Hong Kong-based crypto payments company that issues Visa-linked cards allowing users to spend digital assets at traditional merchants. The company had operated in proximity to Binance's payments infrastructure, which is central to Binance's theory of harm: that RedotPay was positioned inside Binance's user funnel and allegedly used that access to pull users out of it. The $473 million figure represents a significant multiple of what most crypto card startups generate in annual revenue, signaling that Binance is treating this as a major commercial injury rather than a minor partner dispute.

The defendants have not publicly responded to the allegations. RedotPay may contest the characterization of user movement as "diversion," arguing instead that customers migrated voluntarily in response to competitive product features or pricing. The interpretation of the underlying commercial agreement, including what conduct it authorized or prohibited, will likely be the central legal battleground. Damage calculations tied to 470,000 user accounts and $304 million in fund flows will also face scrutiny: courts require plaintiffs to establish not just that funds moved, but that the movement caused quantifiable losses attributable to the defendant's conduct.

For context, the total damages sought exceed the annual revenue of most mid-tier centralized exchanges. Binance's payments vertical, which includes Binance Pay and the Binance Card program, has been a strategic priority as the exchange works to expand beyond spot trading and into everyday consumer spending. Losing 470,000 card users to a counterparty would represent a material setback to that strategy, which helps explain why Binance is pursuing damages at this magnitude rather than seeking a negotiated resolution.

Binance has navigated substantial legal exposure of its own in recent years, most notably the $4.3 billion settlement with the U.S. Department of Justice in November 2023, which saw founder Changpeng Zhao plead guilty to Bank Secrecy Act violations. That backdrop makes the company's aggressive posture in this civil action notable: Binance is now deploying litigation as a competitive and commercial tool, positioning itself as the aggrieved party in a contract dispute rather than a regulatory defendant. Whether the courts agree with its reading of the commercial agreement and its damage theory will determine whether this $473 million claim translates into any actual recovery.