Binance's Lawsuit for $470 Million: Can RedotPay's IPO Dream Survive?

As an industry matures from its nascent stage, when conflicts of interest among players become too significant to resolve with a simple phone call, the courtroom becomes the ultimate arbiter.

Written by: Conflux

A crypto payment unicorn, valued at $4 billion and aiming for a U.S. stock market listing, suddenly finds itself sued by its largest partner. The claim amounts to $472.8 million, nearly 2.6 times its annual revenue. Anyone in this situation would be shaken.

On August 5, Bloomberg reported that three affiliated entities of Binance—Nest Trading, Distributed Technologies, and Chaintecs Consulting Singapore—filed a lawsuit against RedotPay's three co-founders, Gao Zhangpeng, Chen Huacai, and Yao Chao, in a Hong Kong court. Additionally, Chaintecs opened another front in Singapore, with a hearing scheduled for this Friday.

Two jurisdictions, simultaneously in battle. This is not a commercial dispute; it’s a siege.

What exactly happened?

The story begins in November 2023—back then, RedotPay was just a fledgling crypto payment company in Hong Kong, while Binance was expanding its payment footprint globally. The two parties signed a cooperation agreement: users could directly top up RedotPay-issued payment cards using funds from Binance Pay.

Sounds like a win-win, right? Users benefit, RedotPay takes off with Binance's traffic, and Binance retains users through ecosystem cooperation.

But the issue lies in "fund segregation."

The crux of Binance's accusation is simple: RedotPay allowed users to directly top up RedotPay cards with Binance Pay funds without segregating this portion of the funds—meaning that Binance's user funds were mixed with RedotPay's own fund pool.

What’s the practical effect of this operation? 470,000 Binance card users, who should have spent within the Binance payment ecosystem, were seamlessly redirected into RedotPay's system through this channel.

Once users get accustomed to RedotPay's card, who would go back to using Binance?

Even more concerning, this isn’t the first time. In early 2024, the first cooperation agreement collapsed due to the same issue. In March 2025, both parties signed a new agreement, vowing to ensure proper fund segregation this time.

What happened next? On April 3, 2026, Binance unilaterally cut off the Binance Pay functionality on the RedotPay platform.

Same pit, fell twice. The third time, it’s straight to court.

How was the $472.8 million calculated?

This number looks alarming, but the calculation is very "internet-like"—Binance calculated a lifetime value (LTV) of $925 for each redirected user.

So, 470,000 users × $925 ≈ $472.8 million.

This kind of calculation is common in traditional internet lawsuits—you stole my users, how much is each user worth, multiply it, and that’s what you owe me. But in the crypto industry, this might be the first time someone used the LTV model to calculate damages.

Interestingly, if the LTV of these 470,000 users is indeed $925, it also implies that RedotPay has an astonishingly high customer acquisition efficiency. Using someone else's payment channel as its own customer acquisition funnel, while legally questionable, is indeed a textbook-level growth hack in business.

Let’s add some background on RedotPay. Many might be hearing this name for the first time, but in the crypto payment space, RedotPay is already a leading player. Here are some key figures:

• User count: Over 6 million
• Annual payment volume (TPV): Approximately $10 billion
• Annual revenue: Over $150 million
• Planned IPO valuation: Targeting over $4 billion
• Partnering investment banks: Rumored to include several top Wall Street firms (such as JPMorgan, Goldman Sachs, Jefferies, etc.)

In simple terms: this is a company established in 2023 that has achieved an annual payment volume of about $10 billion in less than three years, now knocking on Wall Street's door.

Its core business is straightforward: allowing you to spend stablecoins (USDT, USDC) directly anywhere that supports Visa or Mastercard globally—what you top up is cryptocurrency, and what you spend is fiat currency.

This sector seems simple, but there are very few companies globally that have reached the scale of RedotPay.

The Real Highlights of This Lawsuit

On the surface, this is a contract dispute. But peeling back the layers reveals a fundamental contradiction in the crypto payment industry: Who owns the users?

Binance believes: these users were reached through my Binance Pay; they are essentially my users, and you are just a channel.

RedotPay might counter: users chose our product themselves; using Binance Pay to top up is just a payment method, similar to using WeChat Pay on Taobao, and does not mean the users belong to WeChat.

This dispute has been fought countless times in the Web2 world. The battles between WeChat and Taobao, the revenue-sharing disputes between Apple and Epic, the traffic tug-of-war between Google and OTA sites... fundamentally, they all revolve around the same issue: the power struggle over user ownership between platforms and ecosystem participants.

Only this time, the battlefield has moved to Web3. Moreover, the stakes are higher, and the tactics are harsher.

Although RedotPay officially responded that it "will actively defend against all accusations, and it will not affect daily operations," this statement sounds strong, but the reality is that the upcoming IPO schedule is likely to be disrupted: no underwriter would want to go on a roadshow with a $470 million unresolved lawsuit hanging over them. The first question from investors would be: what if you lose?

Additionally, for a crypto payment company aiming for an IPO, the core selling point is "we are compliant." Now, with the largest former partner accusing you of illegal redirection and fund commingling, this is fatal to the compliance narrative.

However, conversely, if RedotPay can win this lawsuit or reach a decent settlement, it could become the best story for its IPO roadshow: we’ve survived the siege from Binance, what else can’t we handle?

Conclusion: A Bigger Picture

Stepping outside this case itself, there’s a trend worth noting: the crypto industry is entering an "era of litigation."

As an industry matures from its nascent stage, when conflicts of interest among players become too significant to resolve with a simple phone call, the courtroom becomes the ultimate arbiter. Binance suing RedotPay is essentially no different from Google suing Microsoft or Apple suing Samsung—this is a sign of industry maturity.

At the same time, it also indicates that the crypto payment sector's pie has grown large enough to warrant a $470 million lawsuit over it. Three years ago, no one would have fought such a large lawsuit for a crypto payment card company.

Looking back, RedotPay's strategy of leveraging the Binance Pay channel for rapid customer acquisition is extremely efficient in business, but it also left compliance risks. When the partnership broke down, the former growth lever became a litigation weapon in the hands of the other party.

The outcome of this lawsuit will directly impact RedotPay's IPO process and draw a new boundary line for the cooperation model in the entire crypto payment industry.