Binance Lawsuit Raises Questions Over RedotPay’s Growth Model Ahead of IPO

A legal dispute between Binance-affiliated companies and crypto payments platform RedotPay is raising broader questions about customer ownership, platform dependencies, and governance as the fintech firm prepares for a potential public listing.

According to court filings cited by Bloomberg, Binance-affiliated entities are seeking approximately $472.8 million in damages from RedotPay co-founders Gao Zhangpeng, Chan Wa Choi, and Yao Chao. The plaintiffs allege that RedotPay allowed users to fund its payment cards directly from Binance accounts despite contractual agreements requiring the two ecosystems to remain operationally separate.

The case extends beyond a commercial disagreement. It also places renewed scrutiny on how crypto payment providers acquire users and structure strategic partnerships as institutional investors increasingly evaluate the sector.

Investor Pitch Highlights Binance Integration

Bloomberg reported that RedotPay’s confidential 2024 Series A investor presentation described direct card top-ups through Binance Pay as a feature expected to accelerate user acquisition.

However, Binance argues in its legal petition that such top-ups were never authorized under the commercial arrangements between the companies.

Notably, RedotPay’s public announcement of its Series A fundraising did not reference Binance, while the investor materials reportedly highlighted the relationship as part of the company’s growth strategy.

The timing also aligns with the parties’ first commercial agreement, signed in November 2023, which reportedly ended within six months following disagreements over the same funding mechanism.

User Growth Coincided With Renewed Partnership

Despite the earlier breakdown, RedotPay and Binance entered a new commercial agreement in March 2025. Bloomberg reported that the revised arrangement required Binance customer funds to remain separate from RedotPay’s own payment infrastructure.

That same month, RedotPay announced a $40 million Series A financing led by Lightspeed, reporting more than 3 million registered users.

Nine months later, the company raised an additional $107 million, led by Goodwater Capital, stating that its registered user base had surpassed 6 million.

According to Binance’s court filing, more than 470,000 users originated through Binance Card during the disputed relationship. The filing values each customer at approximately $925 in estimated lifetime value, forming a significant portion of the damages claim.

The filing does not specify the precise timeframe over which those users were acquired.

IPO Plans Face Additional Governance Questions

Binance states that it disabled the disputed funding channel on April 3, 2026, alleging that roughly $304 million passed through the mechanism.

The dispute surfaces as RedotPay reportedly explores a U.S. public listing at a valuation exceeding $4 billion, with reports indicating that JPMorgan, Goldman Sachs, and Jefferies are among the banks involved in the process.

While the litigation does not establish wrongdoing, governance, compliance controls, and customer acquisition practices are likely to receive heightened scrutiny during any IPO due diligence process.

In July, RedotPay announced that it had completed a SOC 2 Type II audit. However, the company has not publicly disclosed the audit scope, making it unclear whether the reviewed controls overlap with the issues raised in the ongoing litigation.

Separately, RedotPay’s publicly reported user and revenue metrics originate from company disclosures. Bloomberg also noted that Paymentscan, an analytics provider referenced by RedotPay, relies on company-supplied spending data while independently verifying only on-chain top-up activity.

RedotPay Rejects Allegations

Responding to the proceedings, RedotPay said:

“This proceeding has no impact on our day-to-day operations now or in the future. We are confident in our legal position, and are vigorously defending all claims”.

The statement addresses the litigation involving the company, while the Hong Kong proceedings also name the three co-founders individually. A separate case involving RedotPay affiliates is underway in Singapore.

As the legal proceedings continue, the dispute could become a notable test case for how crypto payment platforms define customer ownership, partner integrations, and operational controls in an increasingly regulated digital asset ecosystem.