TL;DR
- Legal Action: Binance-affiliated firms accuse RedotPay of diverting over 470,000 users from the Binance Card program, seeking $472.8 million in damages.
- Contract Dispute: The lawsuit claims RedotPay let customers fund its stablecoin cards with Binance Pay outside the agreement, allegedly boosting RedotPay’s valuation ahead of a potential IPO.
- Company Responses: RedotPay says operations remain unaffected and it will contest all claims, while the Exchange states it will use legal channels when necessary but will not comment on ongoing proceedings.
Binance-affiliated entities have launched a sweeping legal action against the founders of Hong Kong-based payments firm RedotPay, accusing them of diverting hundreds of thousands of users away from its card program in violation of a commercial agreement. The filing, referenced in a Hong Kong court document obtained by Bloomberg, outlines a dispute that now spans multiple jurisdictions and centers on alleged misuse of Binance Pay to support RedotPay’s own card ecosystem.
Allegations of User Diversion and Contract Breach
According to the court filing, Binance Holdings affiliates Nest Trading, DistributedTechnologies and Chaintecs Consulting Singapore claim RedotPay enabled customers to fund RedotPay’s stablecoin payment cards using Binance Pay outside the agreed framework. The plaintiffs argue this practice steered more than 470,000 users away from the Binance Card offering.
The lawsuit estimates damages at $472.8 million, calculated using a lifetime customer value of $925 per user. The filing also suggests the alleged diversion contributed to RedotPay’s valuation as the company explores a potential initial public offering. In addition to the Hong Kong petition, Chaintecs has initiated a related lawsuit in Singapore, where a hearing is scheduled for Friday.
RedotPay Pushes Back Against Claims
RedotPay responded publicly through a statement on its website, asserting that the legal proceedings will not disrupt its operations. The company said it intends to contest all allegations and emphasized confidence in its legal position. It added that it will refrain from further comment while the matter is before the courts.
Binance’s Position on the Dispute
A spokesperson reiterated that the company does not comment on ongoing legal matters but noted that it will pursue appropriate action through courts and other forums when necessary. The dispute marks one of the more significant legal clashes involving Exchange-linked entities this year, highlighting tensions around partnerships in the rapidly evolving crypto payments sector.
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