Binance sues RedotPay for $472.8 million after diverting users

Binance is taking the founders of Hong Kong-based crypto company RedotPay to court. The exchange is demanding nearly half a billion dollars after the founders of RedotPay allegedly redirected hundreds of thousands of users to a competing product, in breach of a previously signed agreement.

In short:

• Three Binance-affiliated companies are filing a petition with a court in Hong Kong against the three co-founders of RedotPay.
• The claim amounts to $472.8 million, following the redirecting of more than 470,000 Binance users.
• RedotPay denies the allegations and says it will defend itself legally.

What is going on between Binance and RedotPay

Three companies affiliated with Binance Holdings, namely Nest Trading Ltd., DistributedTechnologies Ltd. and Chaintecs Consulting Singapore Pte, are filing a petition with a court in Hong Kong. That is according to Bloomberg, based on a court document. The lawsuit targets the three co-founders of RedotPay: Gao Zhangpeng, Chan Wa Choi and Yao Chao.

According to the complaint, the three founders breached an agreement signed last year. The core allegation is that they deliberately directed more than 470,000 Binance users to RedotPay. Binance claims it has suffered damages of $472.8 million and describes the scheme as fraudulent.

RedotPay denies and prepares its defence

RedotPay said it disputes the allegations. The company indicated it will mount a defence through the appropriate legal channels. Meanwhile, Chaintecs has also filed a separate legal action in Singapore against parties affiliated with RedotPay. A hearing in that case is already scheduled for Friday.

The conflict illustrates how strained relations can become when crypto companies collaborate through contractual agreements. Earlier, we saw how whales actually sent more Bitcoin to Binance, showing that the platform remains active in the market despite legal issues. The outcome of both the Hong Kong and Singapore proceedings could have far-reaching consequences for RedotPay and its founders.