Valued at $2 billion in three years, how does Redotpay operate? - ChainCatcher

Author: Zhou, ChainCatcher

By the end of 2025, Hong Kong-based crypto payment company RedotPay completed a $107 million Series B funding round led by Goodwater Capital, with top institutions such as Sequoia China, Pantera Capital, Circle Ventures, and others participating.

Image from RootData

Why Become a Dark Horse in the Payment Track?

RedotPay’s story began in early 2023. Its co-founder and CEO Michael Gao previously worked at top banks like HSBC and DBS, and was also a core member of crypto technology service provider ChainUp. Additionally, the company’s COO Troy Yao and CTO Xinman Fang both have years of experience in the crypto industry or software development, coming from platforms like Huobi or VCB.

According to insiders, RedotPay was initially incubated with investment from Yuan Dawei, who started researching Bitcoin as early as 2010. He was one of the early co-founders of Huobi and the founder of Kushen Wallet. He has deep influence and trust within the early Bitcoin investor community and among miners, and has been one of the operators behind several popular tokens in recent years. He is familiar with early user growth and narrative logic in the crypto industry.

The team background determines that RedotPay follows a typical Chinese internet approach, which is to first aggressively capture market share at all costs, then raise continuous funding once scale effects are achieved, and finally monetize through diversified financial services.

Specifically, RedotPay’s core business is driven by co-branded Visa debit cards. Users can recharge the app with cryptocurrencies like USDT and BTC, and make instant settlements through the global Visa payment network, including offline ATM withdrawals, supermarket card payments, online subscriptions, and Apple Pay/Google Pay, with the system automatically clearing crypto to fiat.

Building on this, RedotPay has further developed features such as Global Payout (local fiat currency payments), P2P fiat trading zones, and the Earn & Credit financial modules with earning and lending functions.

• Visa Payment Card: supports direct settlement with stablecoins, covering over 100 countries worldwide.
• Global Payout: supports direct withdrawal of local fiat currencies (e.g., BRL, NGN).
• OTC and P2P Markets: by introducing local OTC merchants, users can directly buy or sell cryptocurrencies with local currencies.
• Earn: enhances funds retention through financial products.
• Crypto Credit: offers credit lines collateralized by cryptocurrencies.

Image from RedotPay APP

RedotPay’s early layout focuses heavily on emerging markets with volatile fiat exchange rates, such as Nigeria, Brazil, and Southeast Asia.

• May 2023: RedotPay officially launched in Hong Kong and quickly obtained an MSO license.
• October 2023: Launched virtual Visa cards and physical cards supporting Apple Pay and Google Pay.
• August 2024: User base exceeded 5 million.
• March 2025: Completed $40 million Series A funding led by Lightspeed.
• June 2025: Officially launched Global Payout (international payments).
• September 2025: Secured $47 million in strategic investment, including Coinbase Ventures, with valuation surpassing $1 billion.
• October 2025: Announced P2P market supported over 50 local fiat currencies.
• December 2025: Completed $107 million Series B funding, attracting top institutions like Sequoia China, Pantera Capital, Circle Ventures. Meanwhile, the company disclosed over 6 million global registered users, annual payment volume exceeding $10 billion, coverage of over 100 countries, and profitability.

According to insiders, the current number of genuine global registered users has surpassed 10 million, with a latest valuation possibly reaching $2 billion. From its official start in 2023 to achieving stable profitability today, RedotPay has done so in less than three years, which is rare in the illiquid crypto market.

Its growth logic is based on a strategy called the “Army System.” Simply put, it abandons high-cost online user acquisition in favor of building an offline distribution network.

An anonymous crypto card entrepreneur emphasized that in the early stages, RedotPay almost entirely relied on this ground promotion system, maintaining high card issuance fees and transaction fees to leave significant profit margins for offline promoters. Currently, virtual card issuance costs $10, physical cards $100, with about 1% transaction fee per transaction.

This high-profit mechanism makes every local KOL, OTC merchant, community leader, and even micro-loan intermediary a promoter of RedotPay.

An industry observer noted that RedotPay’s traffic experienced a leap in early 2025, almost entirely driven by user-initiated searches, indicating that it has built word-of-mouth among scene-specific groups, making customer acquisition highly efficient in its early stage.

Official data shows that by November 2025, RedotPay had added over 3 million new users that year alone, with annual payment volume nearly tripling. Industry insiders suggest that among RedotPay users, there may be a core group with high spending capacity and frequency, contributing a significant portion of revenue.

Valuation Premium Behind the NeoBank Closed Loop

But how far can a growth model sustained by high fees go?

Although users are willing to pay high costs at this stage, relying on high transaction fees to “feed” offline agents essentially exchanges financial spreads for growth.

In the fiercely competitive crypto payment environment of 2026, RedotPay seems to face a paradox: to maintain agent loyalty, it must keep high profit margins; but to fend off encroachment by licensed giants, it needs to lower fees.

The high valuation given by the capital market clearly isn’t just paying for the spread. In fact, investors are valuing who can keep users’ money in the platform, and the market is currently paying a premium for this potential banking-like feature.

RedotPay’s real value lies in how advanced it is in transitioning from a payment tool to a crypto-native bank (NeoBank).

Pure payment channels generate very low margins and are easily replaceable, but RedotPay builds a complete capital cycle—“recharge-earn-lend-consume”—through Earn and Crypto Credit functions, preventing users from just charging and leaving.

Under this logic, users deposit USDT into the app, retain funds via the Earn (interest) feature, and then use Credit (collateralized borrowing) to access fiat for spending. As industry observers say, even if only 10% of the $10 billion in transaction volume is converted into retained deposits, the interest spreads and financial derivatives generated could make its profit margins far surpass traditional payments.

BKJ market leader Boyan believes that RedotPay’s success hinges on its early willingness to make product decisions based on real use cases, because genuine user needs are the driving force behind growth.

However, behind this seemingly perfect closed loop, there is also a liquidity game. Boyan also warns that if there is insufficient risk control between earning, lending, and spending, extreme market conditions or liquidity crunches could put the highly nested financial loop under enormous pressure.

Under the NeoBank shell, whether assets are truly legally segregated is the next critical question.

Compliance Concerns and the Race for Boundaries

From another perspective, RedotPay is actually taking advantage of the window where regulation has not yet fully covered emerging markets, completing a race between efficiency and compliance boundaries.

After all, the prosperity of the payment track always carries the sword of Damocles of compliance.

Kevin Piao, founder of Chaintech, emphasizes that the famous “Compliance Cliff” theory also applies in the Web3 payment field: the smaller the scale, the safer; the larger the scale, the more dangerous.

Early rapid growth often exploits regulatory gray areas or delays in bank risk control. But when transaction volume exceeds a certain threshold (e.g., tens of millions of dollars per month), it triggers in-depth compliance audits by card issuers and clearing networks (Visa/Mastercard). Many once-popular crypto card providers have fallen here.

Although RedotPay has been actively pursuing compliance and incurs high compliance costs, its challenge remains the constantly evolving regulatory standards.

RedotPay adopts a “puzzle-piece compliance” structure. While it holds MSO (Money Service Operator), Money Lender, and TCSP (Trust or Company Service Provider) licenses in Hong Kong, and VASP registration in Lithuania, Argentina, and other places, this does not mean it can rest easy.

Lawyer Liu Honglin from Mankun Law Firm explains that this combination generally allows “businesses to operate and explain to regulators,” but it is not a single license that covers everything.

Why is it called a puzzle? Because it essentially combines several traditional financial legal domains—receipts, currency exchange, transfers, cross-border payments, lending, and earning—each governed by different laws.

The biggest risk of this structure is that some links in the product chain may only “look similar,” but in legal terms, they still fall into gray areas.

Liu Honglin points out that Hong Kong’s MSO mainly regulates “fiat currency exchange,” but “stablecoin to fiat exchange” is not automatically considered a currency exchange business in many countries. Moreover, the real gray areas in regulation focus on collateral enforcement in crypto-backed lending and the nature of Earn products.

Regarding the highly capitalized Earn interest feature, Liu states that such products are easily regarded as unregistered securities or collective investment schemes under many jurisdictions. “Regulators see you issuing financial products with yield expectations to the public, which should be subject to securities laws, not just ‘crypto innovation.’ The heavy fines imposed on BlockFi by the SEC serve as a warning.”

In the Crypto Credit (crypto-backed lending) segment, although a lending license addresses “lending qualification,” the legal certainty of crypto assets as collateral is much weaker than traditional collateral. In extreme market conditions or disputes over liquidation, whether the collateral rights will be supported by courts still lacks a mature legal framework.

Conclusion

The crypto market in 2026 is in a window of collective IPO readiness, with RedotPay and its competitors accelerating. In January, its main rival Rain announced a $250 million Series C funding, with a valuation of $1.95 billion.

For RedotPay, licenses are just shells; sustainable compliance is the core. This is also the most fragile part of the team. Whether it can repair its puzzle architecture through compliance before regulatory crackdowns will determine whether it becomes a giant in crypto finance or just a shooting star in payment history.

In short, the race of efficiency, greed, and boundaries has entered the second half.