Recently, some partners have contacted the Sister Sa team, wanting to consult about the legal risks, basic channels, and practical methods of exchanging cryptocurrencies (especially USDT). Today, the Sister Sa team will briefly explain to you the legal risks and feasibility of some current "oil production" channels, to help you use and dispose of encrypted assets legally and in compliance with regulations.
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 customers. The Sajie team has no interest relationship with the channel itself, and the relevant opinions are only one person's opinion and are for reference only.
01. Hong Kong licensed crypto exchange + brokerage channel exchange U
At present, the list of licensed crypto asset exchanges (or operating entities) officially announced by the Hong Kong Securities and Futures Commission has reached 7 companies, and 4 licenses were released in one go two days ago, which shows the prosperity of the development of crypto assets in Hong Kong.
According to the practical experience of the Sajie team, if you want to issue U at present, 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 need to be assisted by BTC/ETH spot channels. For specific operations, take HKVAX as an example.
HKVAX is backed by the veteran brokerage firm "Victory Securities" (stock code: 8540.HK), a fully licensed brokerage firm in Hong Kong. It already held licenses 1, 2, 4, 6, and 9 before entering the crypto asset track. 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 to BTC or ETH or other legal currencies. The transaction cycle is extremely short and is basically not affected by market financial risks. After the exchange is completed, the funds (HKD or USD) will be transferred to a bank account in Hong Kong.
The advantages of this method are that the compliance of the U is good, the capital chain is clear, the possibility of receiving stolen money is low, and there is basically no risk of freezing the card. However, there are also disadvantages. First, the current mainland resident identity cannot directly open a crypto asset trading account. If you use this channel, you may need the help of reliable relatives and friends abroad; secondly, this exchange method may require physical travel to Hong Kong (opening your own bank account, etc.), which is cumbersome and inconvenient for small U withdrawals.
02. Head exchanges such as A-shares and K-shares can sell through OTC
This approach has the lowest cost and you can open an account yourself. However, it should be noted that this channel has become one of the easiest channels to receive black money. After receiving the black money, not only may your bank card be frozen and the funds unusable, but you may even be fined and confiscated by our judicial authorities.
If you want to choose this method to exit U, the Sister Sa team recommends that you check the platform transaction records, evaluations and other information of the trading party, choose a counterparty with high credibility to trade with, and stay away from counterparties with poor trading credibility and significantly abnormal trading records.
03.U card exchange for money
Regarding the compliance of U Card, the Sister Sa team has published a special article to explain:
Sister Sa Team | Can ordinary people use U Card? Will there be any problems with the U Card issuer?
Generally speaking, there is no big problem. Some U cards can even be bound to apps such as WeChat, a yellow kangaroo, and a blue wallet 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 opening agents. Just choose a reliable one with acceptable KYC. Some U card service providers do suddenly stop providing services. This year, the Sajie team received inquiries from several partners, saying that the U card service provider they had previously opened suddenly stopped providing services to users in mainland China in the past few months, resulting in a sum of money stuck in their cards that could not be moved, causing a lot of trouble.
04. Currency traders exchange money for U
Regarding the risks of exchanging money with cryptocurrency traders, most of the risks are similar to OTC withdrawals from exchanges. It is also possible to receive black money from unknown sources, resulting in card freezing or collecting testimony as a witness. The Sajie team has even dealt with extreme cases where the person was investigated as a suspect (accomplice) due to multiple money exchanges with cryptocurrency traders.
In general, the risks of currency traders are relatively high. Do not trust the so-called "frozen card guarantee" or "frozen card compensation" propaganda. If you do not have a very reliable and well-informed partner, do not choose this path to exit U.
05. Hong Kong offline exchange
This route generally requires a bank card from overseas (Hong Kong is also acceptable). In the process of handling the case, Sister Sa's team went to Hong Kong with the client to observe the U-changing process in various offline stores.
There are two types of physical stores in Hong Kong, one is ATM machines, and the other is offline stores. Generally speaking, these stores will not register customer information for daily transactions below HKD 120,000, and customers can exchange and leave as they please; for transactions exceeding HKD 120,000, simple KYC is required, and the handling fee is generally around 4%.
Overall, the Sajie team believes that for ordinary users with clean sources of funds and who only buy and hold coins for personal daily consumption and normal investment behavior, it is indeed a low-cost and convenient channel. However, there is also the risk of receiving black money. It is recommended to exchange at relatively stable and long-term stores such as Mong Kok or Tsim Sha Tsui to prevent accidents.
06. Final words
It should be noted that there is currently no so-called "completely safe" or "perfect" solution to exit U. 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 consider carefully before taking action and do not make rash decisions.
