Author: Zhou, ChainCatcher

By the end of 2025, the 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, and Circle Ventures also participating.

Image from RootData

Why has it become a dark horse in the payment sector?

The story of RedotPay began in early 2023, with its co-founder and CEO Michael Gao having previously served at top banks like HSBC and DBS, and was also a core member of the 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 and VCB.

According to insiders, RedotPay was initially incubated by Yuan Dawei, who began researching Bitcoin in 2010. He was one of the early co-founders of Huobi and the founder of the KuCoin wallet, possessing significant influence and trust within the early Bitcoin investor community and miner groups. He is also one of the operators behind several popular tokens in recent years, well-versed in the early user growth and narrative logic of the crypto industry.

The team's background determines that RedotPay follows a typical Chinese internet strategy, which is to aggressively capture market share at any cost, and once economies of scale are achieved, to continue financing, ultimately monetizing through diversified financial services.

Specifically, RedotPay's core business is driven by a Visa co-branded debit card, allowing users to deposit cryptocurrencies like USDT and BTC into the app, which can then be used for instant settlement through the global Visa payment network, including offline ATM withdrawals, supermarket card payments, online subscriptions, and Apple Pay/Google Pay, with the system automatically completing the conversion from cryptocurrency to fiat.

On this basis, RedotPay has further developed Global Payout (local fiat payment), a P2P fiat trading zone, and an Earn & Credit financial module with interest-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 market: By introducing local OTC merchants, users can directly buy or sell cryptocurrencies with local currency.
• Earn interest: Enhances the duration of funds through financial products.
• Crypto Credit: Provides credit limits backed by cryptocurrency collateral.

Image from RedotPay APP

RedotPay's early footprint is highly focused on emerging markets with significant fiat currency fluctuations, such as Nigeria, Brazil, and Southeast Asia.

• May 2023: RedotPay officially launched in Hong Kong and quickly obtained an MSO license.
• October 2023: Officially launched virtual Visa cards and physical cards, supporting Apple Pay and Google Pay.
• August 2024: User count surpassed 5 million.
• March 2025: Completed a $40 million Series A funding round led by Lightspeed.
• June 2025: Officially launched the Global Payout feature.
• September 2025: Secured $47 million in strategic investment, bringing in capital from Coinbase Ventures, with a valuation reaching $1 billion.
• October 2025: Announced that the P2P market supports transactions in over 50 local fiat currencies.
• December 2025: Completed a $107 million Series B funding round, attracting top institutions like Sequoia China, Pantera Capital, and Circle Ventures. Meanwhile, the official disclosure revealed that its global registered users exceeded 6 million, with annual payment volume surpassing $10 billion, covering over 100 countries, and achieving profitability.

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

Its growth logic is a combat model referred to as the "Army System." In simple terms, it is abandoning high-cost online user acquisition in favor of building an offline distribution network.

An anonymous crypto card entrepreneur emphasized that RedotPay initially relied almost entirely on this grassroots promotion system, maintaining a high card issuance fee and transaction fees to provide a substantial profit margin for the offline promotion teams. Currently, the virtual card issuance fee is $10, while the physical card is $100, and each transaction includes about a 1% fee.

The high profit-sharing mechanism allows every local KOL, OTC merchant, community leader, and even small loan intermediaries to become promoters of RedotPay.

An industry observer noted that RedotPay's traffic experienced a stepwise increase in early 2025, with almost all coming from users actively searching, indicating that it has formed a word-of-mouth diffusion among the target audience, making its customer acquisition efficiency top in the industry during the early stages.

According to official data, as of November 2025, RedotPay added over 3 million new users in that year alone, with annual payment volume increasing nearly threefold year-on-year. Industry insiders suggest that among RedotPay's users, there may be a group of core users with high consumption capacity and frequency, contributing a significant portion of the revenue.

Valuation Premium Behind the NeoBank Closed Loop

However, how far can a strategy relying on high fees for incentives go?

Although users are currently willing to pay high costs, the model of 'feeding' offline agents with high fees essentially exchanges financial spreads for growth speed.

In the fiercely competitive environment of crypto payments in 2026, RedotPay seems to be caught in a paradox: to maintain agent loyalty, it must keep high profit-sharing; yet to counter the encroachment of licensed large firms, it must lower fees.

The high valuation given by the capital market clearly reflects more than just a payment for the buy-sell spread. In fact, what capital values is who can keep users' money, and the market is currently paying a premium for this potential banking attribute.

The true value of RedotPay lies in its high degree of completion in transitioning from a payment tool to a crypto-native bank (NeoBank).

Pure payment channels have low gross margins and are easily replaceable, while RedotPay constructs a complete financial closed loop of "deposit - earn interest - borrow - spend" through Earn interest and Crypto Credit lending functions, preventing users from leaving immediately after depositing.

Under this logic, users deposit USDT into the app, retain funds through the Earn (interest-earning) function, and then use Credit (collateralized lending) to obtain fiat limits for spending. As industry observers have noted, even if only 10% of the $10 billion transaction volume converts to retained deposits, the interest spread and financial derivative income generated will far exceed traditional payments.

BKJ market leader Boyan believes that the key to RedotPay's success lies in its early willingness to make product decisions around real usage scenarios, as genuine user needs are the driving force for development.

However, behind the seemingly attractive closed loop lies a liquidity game. Boyan also cautioned that once there is insufficient risk control buffer between interest-earning, credit, and spending, the highly nested financial closed loop may face significant pressure risks during extreme market conditions or liquidity tightness.

Beneath the NeoBank shell, whether assets have achieved true legal separation is the next question it must answer.

Compliance Concerns and the Race Against Boundaries

From another perspective, RedotPay is actually taking advantage of the window period where regulations have not fully covered emerging markets, completing a race regarding efficiency and compliance boundaries.

After all, the prosperity of the payment sector always exists under the Damocles sword of compliance.

Chaintech founder Kevin Piao emphasized that the well-known "compliance cliff" theory is also applicable in the Web3 payment field, meaning that the smaller the scale, the safer it is; the larger the scale, the more dangerous it becomes.

Early rapid growth often stems from exploiting regulatory gray areas or the lag in bank risk control. However, when transaction volumes exceed a certain threshold (for example, tens of millions of dollars monthly), it triggers deep compliance audits from issuers and clearing networks (Visa/Mastercard). Many once-popular crypto card companies have failed at this stage.

Although RedotPay has been actively laying out compliance and incurring high compliance maintenance costs, the challenges it faces still lie in the dynamic upgrading of regulatory standards.

RedotPay adopts a "puzzle-like compliance" structure. Although it holds MSO (Money Service Operator), Money Lender licenses, and TCSP (Trust or Company Service Provider) licenses in Hong Kong, and has obtained VASP registration in Lithuania, Argentina, etc., this does not mean it can rest easy.

Lawyer Liu Honglin from Mankun Law Firm analyzed that this combination overall belongs to 'business can operate, and can explain to regulators,' but it is not a single license that covers everything.

Why is it called a puzzle? Because it actually stacks several traditional financial services with completely different legal classifications, such as payment collection, currency exchange, remittance, cross-border payment, lending, and interest-earning.

The biggest risk of this structure is that certain links in the product chain may only "look similar," but legally they still reside in a gray area.

Lawyer Liu Honglin pointed out that the Hong Kong MSO essentially regulates "fiat currency exchange," but "stablecoin to fiat currency" in many countries is not automatically regarded as currency exchange. Moreover, the real regulatory gray area focuses on the execution of collateral in crypto-backed lending and the legal classification of Earn products.

Regarding the Earn interest function, which has attracted significant capital attention, Lawyer Liu bluntly stated that such products are easily viewed as unregistered securities or collective investment schemes from the regulatory perspective of many countries. "If regulators believe you are issuing financial products to the public with expected returns, you should be subject to securities law regulation, rather than circumventing it with 'crypto innovation.' The heavy penalties imposed by the U.S. SEC on BlockFi serve as a cautionary tale."

In the Crypto Credit (crypto collateral lending) segment, although the lender's license addresses the "lending qualification," the legal certainty of using crypto assets as collateral is much weaker than that of traditional collateral. In the event of extreme market conditions or liquidation disputes, whether the secured rights can be supported by the courts currently lacks a mature legal framework.

Conclusion

The crypto market in 2026 is entering a collective IPO window, with RedotPay and its competitors accelerating their efforts. In January of this year, its core competitor Rain announced the completion of a $250 million Series C funding round, reaching a valuation of $1.95 billion.

For RedotPay, the license is merely a shell; continuous compliance is the lifeblood, and this is the team's most vulnerable aspect. Whether it can repair its puzzle structure through compliance efforts before regulatory tightening will determine whether it becomes a financial giant in the crypto world or merely a shooting star in the history of payments.

In summary, this race concerning efficiency, greed, and boundaries has already entered its second half.

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