Binance Launches Legal Action Against RedotPay Seeking $473M Over User Diversion Claims
Companies associated with Binance have initiated legal proceedings against RedotPay, claiming the firm redirected over 470,000 Binance Card customers in violation of their business agreement, pursuing damages totaling nearly $473 million.
Companies with ties to Binance have initiated legal action against the co-founders of the Hong Kong-headquartered digital currency payments firm RedotPay, claiming they redirected over 470,000 Binance Card customers in violation of the terms of their business partnership.
The companies bringing the lawsuit are pursuing damages totaling nearly $473 million, with allegations that the actions in question boosted RedotPay's market valuation while the company explores the possibility of launching an initial public offering, according to a Wednesday report from Bloomberg that referenced court documents filed in Hong Kong that the publication had accessed.
The report indicates that Nest Trading, DistributedTechnologies and Chaintecs Consulting Singapore, all affiliates of Binance Holdings, submitted the legal complaint targeting RedotPay's co-founders Gao Zhangpeng, Chan Wa Choi and Yao Chao.
The allegations from Binance state that RedotPay permitted customers to load RedotPay stablecoin payment cards using Binance Pay in ways that fell outside the parameters of their contractual arrangement. The legal complaint asserts that RedotPay redirected in excess of 470,000 customers, with Binance calculating total damages at $472.8 million using a lifetime customer value calculation of $925 for each individual user. Additionally, Chaintecs has initiated a separate but connected lawsuit in Singapore, with court proceedings set to take place on Friday.
Following these developments, RedotPay released a formal statement on its company website, asserting that the ongoing legal actions will have no impact on its day-to-day business operations and confirming its intention to challenge the allegations.
We are confident in our legal position, and are vigorously defending all claims. As the matter is currently before the court, RedotPay will not be commenting further on the allegations, the ongoing proceedings, or matters that will be addressed through the judicial process.
When approached by Cointelegraph, Binance declined to provide specific commentary regarding the particulars of the ongoing litigation. A representative for Binance stated: "While Binance does not comment on ongoing litigation, where necessary we will use courts and other forums to pursue what is right."