How a crypto startup quietly siphoned 470,000 Binance users to build a $4 billion card empire

Binance has filed a Hong Kong petition against RedotPay’s founders, alleging the payment startup diverted over 470,000 Binance Card customers through a shared funding partnership to build a competing stablecoin card product worth $4 billion. The case exposes a structural tension in crypto payment ecosystems where distribution partners can leverage access to user bases and capital rails to launch competing products, a dynamic now large enough to generate nine-figure disputes.

• Binance claims RedotPay diverted more than 470,000 Binance Card users into its own competing stablecoin card product.
• RedotPay allegedly received roughly $304 million in user funds routed through Binance Pay that it used to build its customer base.
• RedotPay now serves 8 million users, processes $14 billion in annualized payment volume, and is considering an IPO valuing the company above $4 billion.

• $472.8M Claimed losses by Binance based on estimated customer lifetime value
• 470,000+ Binance Card users Binance alleges were diverted to RedotPay product
• $14B RedotPay’s annualized payment volume, up from unspecified baseline

Binance-affiliated entities filed a legal petition in Hong Kong against RedotPay’s founders this month, alleging that the payments startup exploited a distribution partnership to systematically redirect Binance Card customers into a competing stablecoin card product.

According to filings reviewed by Bloomberg News, Binance claims the diversion resulted in $472.8 million in losses, calculated using an estimated lifetime value of $925 per customer.

The dispute centers on roughly $304 million in user funds that Binance says it routed to RedotPay through Binance Pay, its payment rail, which RedotPay allegedly repurposed to acquire and retain customers rather than simply process payments on behalf of Binance.

RedotPay has denied the allegations and stated that the Hong Kong petition will not affect its operational status.

The startup now reports serving more than 8 million users and processing roughly $14 billion in annualized payment volume, a scale that has reportedly attracted interest from institutional investors and positioned the company to explore an initial public offering at a valuation exceeding $4 billion.

That scale, Binance contends in its filing, was built partly through customer acquisition that violated the terms of the partnership agreement between the two entities.

Binance Calculated RedotPay’s Gains at $925 Per Diverted Customer

The mathematics underlying Binance’s claim reveals how valuable user relationships have become in crypto payment networks.

Binance estimated that each of the 470,000 diverted customers represented $925 in lifetime value to the platform, a figure derived from conversion fees on card transactions, spending revenue, merchant data collection, and the opportunity to cross-sell additional financial products.

Multiplied across the alleged diversion, that methodology produces the $472.8 million loss figure Binance cited in its petition.

That valuation framework reflects the economics of stablecoin card products, where profitability depends less on the stablecoin itself and more on the daily engagement of the application through which customers access it. Each transaction, a top-up, a card swipe, a balance check, generates data, creates switching costs, and opens pathways to offer additional services.

The customer’s daily app-opening habit becomes the captured asset, not the stablecoin balance. In that context, losing 470,000 active users represents not only the transaction volume those users would have generated, but also the network effects and data advantages they would have provided to Binance’s ecosystem.

The timing of RedotPay’s growth suggests the partnership was central to its expansion trajectory.

RedotPay grew from an unknown startup to processing $14 billion in annualized volume while operating through a funding rail Binance controlled, giving Binance visibility into the startup’s growth from the beginning.

Binance’s allegation is not that RedotPay was dishonest about its scale, but that the scale was achieved by diverting customers who arrived through Binance’s own user base and Binance’s own capital rails, rather than through RedotPay’s independent customer acquisition efforts.

Binance Pay Became RedotPay’s Primary User Acquisition Channel

The specific mechanism Binance alleges in its petition involves the Binance Pay funding rail, a system designed to let merchants and partners process payments within the Binance ecosystem.

According to Binance’s account, RedotPay was granted access to this rail as a distribution partner, a standard arrangement in which a third party receives funds or settlement services in exchange for driving payment volume. Instead, Binance claims, RedotPay used that access to build direct relationships with Binance’s own customers, converting them from Binance Card users into RedotPay card users.

This dynamic mirrors a structural pattern already visible in other major crypto payment partnerships, though without the legal conflict. Circle, the USDC stablecoin issuer, pays Coinbase for distribution and shares reserve economics based on the volume of USDC held in Coinbase’s products, a model documented in Circle’s regulatory filings.

Coinbase simultaneously backs Open USD, a competing stablecoin model developed with Visa, Mastercard, and over 140 other companies. That arrangement means Coinbase has both a financial incentive to distribute USDC and a competing product it can promote, creating an inherent tension over which stablecoin gets featured most prominently in Coinbase’s user interface.

Visa and Stripe exhibit a similar pattern without litigation. Stripe’s Bridge product uses Visa’s card rails to enable apps like Phantom and MetaMask to let users spend stablecoin balances directly, while Bridge gives Visa a route into wallet-native crypto spending.

Both companies expand beyond that arrangement, each able to pursue their own stablecoin strategies without direct conflict because the partnership is more clearly a services arrangement than a customer-sharing agreement.

RedotPay’s case differs because the alleged diversion involved an integrated customer base from the start.

When Binance granted RedotPay access to Binance Pay and Binance Card customer data, the two companies were not simply swapping settlement services or splitting reserve economics. They were sharing the same pool of daily-active users, and Binance is asserting that RedotPay captured that pool for its own competing product rather than processing Binance’s transactions for a fee.

The distinction matters legally and economically: in a true partnership, each party gains something it could not build alone; in a customer acquisition channel disguised as a partnership, one party extracts value the other party created.

RedotPay’s IPO Plans and $4 Billion Valuation Now Face Litigation Risk

RedotPay’s reported plans to pursue an IPO at a valuation exceeding $4 billion suggest the startup has attracted significant institutional interest despite the Binance dispute. An 8-million-user payment platform processing $14 billion in annualized volume would rank among the larger fintech payment networks globally, comparable in user scale to several public payment processors.

However, the Hong Kong petition introduces material litigation risk into any IPO process, requiring disclosure of the dispute and its potential financial impact.

If Binance’s $472.8 million claim succeeds even partially, the damages could materially affect RedotPay’s valuation or prevent the company from accessing public markets until the dispute is resolved.

Conversely, if RedotPay prevails or the case settles for a fraction of the claimed amount, it could clear the path for an IPO while establishing a precedent that stablecoin card partnerships can legally shift users between products despite initial distribution agreements.

The case will likely establish whether customer diversion through shared funding rails constitutes a breach of partnership terms or a standard industry practice.

The outcome will also signal to institutional investors how much legal risk attaches to stablecoin card partnerships generally. If Binance’s claim succeeds, it suggests that distribution partners can be held liable for converting shared user bases into competing products, imposing legal discipline on future partnership structures. If RedotPay prevails, it suggests that access to a partner’s funding rail grants enough operational independence that a partner can use it to build