HONG KONG - Binance affiliates are suing the founders of Hong Kong-based crypto payments firm RedotPay for allegedly diverting hundreds of thousands of customers to a competing product in a “fraudulent scheme”, claiming nearly half a billion dollars in losses.

The Binance Holdings-affiliated entities Nest Trading Ltd., DistributedTechnologies Ltd and Chaintecs Consulting Singapore Pte filed a petition in Hong Kong alleging that RedotPay co-founders Gao Zhangpeng, Chan Wa Choi and Yao Chao violated the terms of an agreement signed in 2025, according to a court document obtained by Bloomberg News on Aug 4.

The original agreement was meant to benefit both companies: RedotPay got access to users of the world’s largest crypto exchange, while Binance’s payment services were made available across a broader network.

However, Binance alleges that its users were allowed to top up a RedotPay stablecoin payment card, outside the scope of their agreement.

The lawsuit comes at a critical time for RedotPay. The company has been considering an initial public offering at a potential US$4 billion valuation, Bloomberg previously reported.

It has also been trying to raise fresh funds amid churn in senior executives.

Binance is now alleging that channeling more than 470,000 customers away from Binance Card to RedotPay was a contributing factor to RedotPay’s valuation.

Estimating the lifetime value per customer at US$925, Binance is claiming US$472.8 million (S$605 million) in losses.

“Since March 2026, the Binance Group has discovered that RedotPay Group had been allowing and encouraging Binance Pay funds to be used, without segregation, for the prohibited use within RedotPay, including card top-ups for RedotPay Card,” Binance said in the filing.

RedotPay rejected the allegations, saying the company would “respond through the appropriate legal process”.

“RedotPay is aware of legal proceedings initia...