Web3 Lawyer: What are the current channels and methods for legally producing "U"?

Author: Xiao Sa lawyer

Recently, some partners have contacted the Sajie team and want to inquire about the legal risks of exchanging cryptocurrencies (especially USDT) as well as the basic channels and practical operation methods. Today, the Sajie team will briefly explain to you some of the current "oil" The legal risks and feasibility of the channel help everyone use and dispose of crypto assets legally and compliantly.

In particular, this article is only for ordinary users who have clean sources of funds and buy and hold coins only for personal daily consumption and normal investment behavior. At the same time, all the methods detailed in this article are known to the Sajie team in the process of providing legal services to clients. The Sajie team does not have any interest relationship with the channel itself. The relevant opinions are the opinions of one person and are for reference only.

01. Hong Kong licensed crypto exchange + brokerage channel for U

At present, the list of licensed crypto asset exchanges (or operating entities) officially announced by the Hong Kong Securities Regulatory Commission has reached 7. In the past two days, 4 licenses were released in one go, which shows the prosperity of crypto assets in Hong Kong.

According to the practical experience of Sister Sa’s team, if you want to export U now, going through the Hong Kong channel is actually a legal and compliant way with low legal risks. However, it should be noted that currently crypto assets such as USDT cannot be traded directly on licensed exchanges, and auxiliary operations need to be performed through BTC/ETH spot channels. For specific practical operations, take HKVAX as an example.

Behind HKVAX is the veteran securities company "Victory Securities" (stock code: 8540.HK), a fully licensed securities company in Hong Kong. Before entering the crypto asset track, it already held licenses No. 1, 2, 4, 6, and 9. In 2023, it obtained the crypto-asset trading, consulting and asset management service license issued by the Hong Kong Securities Regulatory Commission. Therefore, it can legally use the Hong Kong BTC/ETH spot channel to help users convert U into BTC or ETH or other legal currencies. The transaction cycle is extremely short and will basically not be affected by market financial risks. After the exchange is completed, the funds (Hong Kong dollars or US dollars) will be transferred to the bank account in Hong Kong.

The advantage of this method is that the compliance of U-exit is better, the fund link is clear, the possibility of receiving stolen money is low, and there is basically no risk of card freezing. However, there are also disadvantages. First of all, current mainland residents cannot directly open a crypto-asset trading account. If you use this channel, you may need help from reliable relatives and friends abroad; secondly, this exchange method may require you to physically go to Hong Kong ( Opening your own bank account, etc.) is more cumbersome and inconvenient for small withdrawals.

02. Leading exchanges such as An and K can sell through OTC.

This method is the lowest cost and you can open an account by yourself. However, it should be noted that this channel has become one of the easiest channels to receive black money. After receiving black money, not only the bank card may be frozen and the funds cannot be used. It may even be fined and confiscated by our country's judicial authorities in the future.

If you want to choose this method to export U, the Sajie team recommends checking the platform transaction records, evaluations and other information of the counterparty, choosing a counterparty with a high reputation for transactions, and staying away from counterparties with poor transaction reputation and significantly abnormal transaction records.

03. Exchange money with U card

Regarding the compliance of U-cards, Sister Sa’s team has published a special article to explain:

Sajie Team | Can ordinary people use U-cards? Will something happen to the U-Card issuer?

Generally speaking, it is not a big problem. Some U cards can even be bound to WeChat, a certain yellow kangaroo, a certain blue wallet and other apps for use.

However, U-cards also have risks. Currently, MasterCard or UnionPay U-cards are more common on the market. The source of funds is relatively safe, but there are too many card-issuing agents. Just choose one that is reliable and can pass KYC. Some U-card service providers have indeed suddenly stopped providing services. The Sajie team has received inquiries from several partners this year, saying that their previously established U-card service providers suddenly stopped providing services to mainland China in the past few months. As a result, I still had a lot of money stuck in my account and couldn't move it, which caused a lot of trouble.

04. The currency dealer exchanges money and gives U

Regarding the risks of money exchange at currency dealers, most of the risks are similar to OTC withdrawals from exchanges. It is also possible to receive black money from unknown sources, resulting in the card being frozen or to collect testimony as a witness. Sajie’s team has even dealt with multiple cases of going to currency dealers. Extreme cases of exchanging money leading to investigation as a suspect (accomplice).

Generally speaking, the risks of currency dealers are relatively high. Do not believe in the so-called "frozen card guarantee" and "frozen card compensation" and other propaganda. If you do not have a very reliable and knowledgeable partner, do not choose this path to go out. .

05. Exchange U offline in Hong Kong

This method generally requires an overseas (Hong Kong is also acceptable) bank card. In the process of handling the case, Sajie's team went to Hong Kong with the client to visit the U-changing process in various offline stores.

There are two types of physical stores in Hong Kong, one is an ATM machine, and the other is an offline store. Under normal circumstances, these small stores will not register customer information for daily transactions of less than 120,000 Hong Kong dollars, and can change as they go; for transactions exceeding 120,000 Hong Kong dollars, simple KYC is required, and the handling fee is generally 4 %Floating up and down.

Overall, the Sajie team believes that it is indeed a low-cost and convenient channel for ordinary users who have clean sources of funds and only buy and hold coins for personal daily consumption and normal investment behavior. However, there is also the risk of receiving black money. It is recommended to exchange it at a relatively stable and long-term store such as Mong Kok or Tsim Sha Tsui to prevent accidents.

06. Write at the end

It should be noted that there is currently no so-called "completely safe" or "perfect" U-exit solution. Even with the centralized solution path given in this article, there are still risks such as receiving black money and high transaction costs. It is recommended that partners carefully consider Take action first and never make rash decisions.