Binance is really angry this time.

Scouring the public records, Binance's system very rarely sues a partner for breach of business cooperation. Its most famous lawsuit dates back to seven or eight years ago, involving a financing dispute with Sequoia Capital.

However, this time, it has targeted a U-card payment company, RedotPay, which has gone through two rounds of cooperation with Binance and was preparing to go to the U.S. for an IPO. Binance directly sued the company's three founders, seeking damages of $472.8 million, which is nearly two and a half years of the payment company's revenue.

The timing of Binance's action is also very delicate. At this moment, RedotPay, which is considering going public with a valuation of around $4 billion, is also in talks for a new round of financing.

At 11:30 this afternoon, the Singapore High Court held a procedural meeting that could end in fifteen minutes. Forty-eight hours before this hearing, Bloomberg obtained a court document from Hong Kong: three entities affiliated with Binance brought the three co-founders of RedotPay to the defendant's table: Gao Zhangpeng, the current CEO of the company; Chan Wa Choi; and Yao Chao.

In the lawsuit, Binance used a very strong term: fraudulent scheme.

The allegations are as follows: over 470,000 users originally belonging to Binance Card were redirected to RedotPay; Binance Pay funds were not segregated as agreed but were instead allowed, even encouraged, to be used to top up RedotPay cards. Binance claims approximately $472.8 million based on a $925 lifetime value per user.

Binance's Most Challenging Year

The story of RedotPay and Binance began three years ago.

2023 was the most challenging year for Binance. In June, the U.S. SEC sued Binance and Changpeng Zhao. In July, Visa stopped issuing new Binance co-branded cards in Europe. In August, Mastercard announced the termination of its cooperation with Binance Card, and some South American users were informed that the cards could no longer be used. In October, Binance announced that Visa debit card services in Europe would be terminated.

However, in the announcement, Binance provided an alternative: switching to Binance Pay.

This was a forced strategic shift for Binance. With Binance Card gone but the demand for users to spend cryptocurrency still present, Binance had one remaining payment channel, Binance Pay, albeit needing refinement, especially in its operations.

Meanwhile, in Shenzhen and Hong Kong, a company called RedotPay was also being established around the same time.

RedotPay's legal entity is named Red Dot Technology Limited, registered in Hong Kong in 2023. Its flagship product is a Visa card paired with a stablecoin wallet: users can deposit USDT and BTC into the app and then use the Visa network for card payments, cash withdrawals, and Apple Pay integration. The system automatically handles the conversion of cryptocurrency to fiat currency in the background. The app was launched in August 2023, and physical cards were issued in October.

Within the Chinese-speaking community, it is more commonly known as the "Little Red Card."

The person behind it is Yuan Dawei. Dawei Yuan, an early co-founder of Huobi, left the exchange in 2015. In 2016, he founded CoolBitX, a hardware wallet company in Beijing, making him one of the earliest pioneers of digital asset cold storage in China. According to industry reports, RedotPay was initially incubated and created with his investment. He started researching Bitcoin in 2010 and gained trust within the early Bitcoin holder and miner communities. This trust was a key resource that helped kickstart this new company.

Therefore, the explanation within the industry at that time regarding the "RedotPay and Binance collaboration" was quite simple: Yuan Dawei had a good relationship with the Binance ecosystem, which allowed for the initial contact and collaboration.

After all, initially, RedotPay itself was much smaller than outsiders imagined.

“Because at the beginning, the RedotPay project itself had very few people involved, and the relationships inside were quite complex,” a source familiar with the matter told BlockBeats. “Mr. Yuan is probably a shareholder, but he was not very involved in the actual operation. There were very few full-time staff in the early days of RedotPay. Those working on the technical product side were not full-time employees of RedotPay but part-time.”

On the card-issuing side, RedotPay's initial card was issued in collaboration with the Hong Kong card issuer Reap. “In general, it was packaged as a way to issue cards to enterprises, in card issuance,” explained a source familiar with the matter. Reap is a Hong Kong fintech company holding the main membership of Visa and specializing in white-label card issuance and cross-border payments for other businesses.

Based on his speculation, the group that founded RedotPay should also have been simultaneously operating another entity. Through the identity of this operational company, they were responsible for the operation and promotion of the payment business for Binance Pay, acting as a contractor. That company may have had no equity relationship with RedotPay; it was just that some of the ultimate beneficial owners overlapped between the two.

In other words, by the summer of 2023, RedotPay had a usable card, a team that almost no one knew, and volume that just wouldn't pick up.

"At first, there was not much volume," he said. "I am quite clear that their first significant volume came from Binance."

The First Conflict Between Binance and RedotPay

In November 2023, an entity related to Binance signed the first cooperation agreement with RedotPay. This is the timeline mentioned in the Hong Kong lawsuit.

A later-deleted announcement by RedotPay, preserved in a web archive, described this relationship unequivocally: Users would open the Binance App, access the mini-program, select RedotPay, enter the amount, click "Pay with Binance Pay," and receive a recharge redemption code. The announcement stated that this process compressed the recharge time from minutes to seconds. The fees were clearly listed, with Binance Pay charging 1% and the RedotPay mini-program charging 1%. The announcement also specifically introduced a feature called Lightning Deposit, allowing Binance users to directly deposit their US dollar stablecoins into RedotPay.

Collaboration announcement released by RedotPay in 2024

For RedotPay, this channel saved the most expensive part of customer acquisition: convincing a stranger to download the app, register, KYC, and deposit funds. It no longer needed to search for users one by one; the users were right at its doorstep.

However, this initial agreement did not last for more than six months.

According to public reports citing the lawsuit, the agreement ruptured within less than six months of signing, with the dispute revolving around Binance Pay funds being used to top up the prepaid RedotPay card.

Here lies the most glaring contradiction in the entire case: RedotPay's public announcement at the time stated that direct card top-ups were possible. The same pathway—on one side was the product's selling point on the official website, and on the other was Binance's view of overstepping. Whether the promotion outpaced the contract, whether certain specific routes were in violation, or whether there were differing understandings between the two parties regarding "recharge accounts" and "cards available for spending," without further information, it is impossible to make a judgment before the original contract is made public.

However, this time the falling-out did not stop RedotPay.

In 2024, RedotPay's Series A funding documents still listed cooperation with Binance as a "user adoption accelerator" factor, and made it clear that users could deposit funds from Binance Pay directly to RedotPay cards. All of this was presented as part of RedotPay's growth story to investors.

Two Years, $1 Billion Valuation

Perhaps the relationship was strong enough, or perhaps all the "i's were dotted and t's were crossed."

In March 2025, Binance and RedotPay once again sat down at the negotiation table. This marked the beginning of their second collaboration agreement.

According to public reports recounting the lawsuit, the core of the second agreement was: funds from Binance could be used to redeem fiat currency, make internal transfers within the RedotPay App, purchase RedotPay's own products, but could not be directly converted into the consumable balance of RedotPay cards, and must be identified as isolated funds in the accounts.

In simple terms: Binance's money can still enter RedotPay's door, but it cannot leave RedotPay's door.

Why was Binance so fixated on this step? Because the account balance and card balance exist in two different worlds. The account balance is the destination of a one-time transfer; the card balance is the starting point of a spending relationship. Once a user places money into their card wallet, they will link it to Apple Pay, buy coffee, pay for subscriptions, pay bills, and their daily cash flow will thereafter revolve around this platform. The real opportunity for monetization of the card lies here, in the exchange rate spread, card transaction fees, balance retention, rather than the small card issuance fee.

So-called fund isolation is not about putting money into different drawers, but about labeling its source within the system: this money is from Binance Pay, can only take the few paths allowed by the contract, cannot be mixed with regular balance, and certainly cannot automatically transform into a balance available for spending.

Following the start of the second collaboration, RedotPay's fundraising pace began to accelerate.

Also in March 2025, RedotPay announced the completion of a $40 million Series A funding round, led by Lightspeed, with participation from HSG and Galaxy Ventures. In September, Coinbase Ventures joined with an additional $47 million in strategic financing, pushing the company's valuation to $1 billion for the first time, officially becoming a unicorn. In December, Goodwater Capital led a $107 million Series B round, with Pantera Capital, Blockchain Capital, and Circle Ventures as co-investors, and HSG continuing to increase their investment. Within a year, RedotPay raised a total of $194 million.

The operational data in the same set of financing materials is equally impressive: as of November 2025, registered users exceeded 6 million, spanning over 100 markets; annualized payment volume surpassed $100 billion, with annualized revenue exceeding $1.5 billion. The annual payment volume tripled, with 3 million new users added.

A company that had only a few full-time employees two years ago and had to rely on others to issue cards has now achieved a billion-dollar valuation.

Mass Emailing to "Poach" Binance Customers

Binance's allegation is: over 470,000 users who were originally Binance cardholders were redirected to RedotPay. How did RedotPay "poach" these users? We have not seen a reasonable explanation across various channels.

However, insiders have pointed out to us that RedotPay's most critical and primitive move in the business war was: sending emails.

According to the complaint, Binance discovered the issue in March 2026: RedotPay was still allowing and even encouraging the unsegregated use of Binance Pay funds for prohibited purposes, including recharging RedotPay cards. Then, on April 3, Binance ceased the relevant support, citing a review of merchant partners. Four months later, Binance filed a lawsuit in Hong Kong.

But according to insiders, Binance may have discovered issues with RedotPay back in 2023, during a time when Binance cards were failing and many users couldn't swipe their cards.

"Those few people who were in charge of operating Binance Pay are probably the founding team of RedotPay. They had Binance's customer emails, so they basically directly emailed customers to divert them to RedotPay," according to the insider.

"This is definitely not normal." When asked if this could be considered a standard industry practice, his response was quick, "If it wasn't explicitly approved by Binance, then it's definitely not a normal business practice."

However, the insider also mentioned, "Regarding this matter, Binance probably didn't know anything about it at that time, and I think it's quite unlikely."

He believed that when an exchange is willing to hand over this operational aspect and the data access to an external team, it indicates a deep personal relationship. The more likely scenario is that Binance's core executives wouldn't be concerned about this relatively unimportant business line, and the individuals in charge of this project "turned a blind eye, silently approved, or even had verbal acquiescence."

Vendetta on the Road to RedotPay's IPO

In February 2026, Bloomberg reported that RedotPay is working with JPMorgan Chase, Goldman Sachs, and JFrog to prepare for a New York listing, with a fundraising target of over $1 billion and a valuation exceeding $4 billion, potentially landing as early as this year. This will be one of the largest IPOs in the Asian stablecoin race this year.

However, this road has not been smooth. In March, Bloomberg reported that RedotPay has seen at least five executives depart in the past 12 months, still lacks a CFO as it approaches the IPO sprint, and is simultaneously seeking up to $150 million in new funding.

A company without a CFO, experiencing executive turnover, and in the midst of fundraising has now received a bill equivalent to two and a half years of its revenue. Is this a mere coincidence?

"In fact, RedotPay should have had the capacity to pay this a year ago as well." He speculated that the two parties probably negotiated on this matter a long time ago but never reached an agreement, and now is the perfect time for "vendetta."

From RedotPay's perspective, a payment company preparing for a U.S. IPO should not have an endless cross-border lawsuit in its prospectus. Underwriters will inquire, investors will inquire, regulators will inquire. In contrast, presenting a one-time payment for a settlement agreement to transform the risk from "pending litigation" to "resolved matter" is the fastest route to the IPO bell.

It seems that a settlement is a highly probable event.

"I feel that Binance's desired fine amount is a moderate sum." This insider said if the claim amount reaches tens of billions of dollars, the other party would refuse to discuss and simply drag on; however, $470 million is a "significant amount that will make RedotPay bleed, but it is also something they can grit their teeth and pay."

This is an offer designed for settlement.

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