Recently, some partners contacted Sister Sa's team, wanting to inquire about the legal risks of exchanging cryptocurrencies (especially USDT) and the basic channels and practical operation methods. Today, Sister Sa's team will briefly explain the legal risks and feasibility of some current 'oil cashing out' channels, helping everyone to use and dispose of crypto assets legally and compliantly.
Special note, this article is only for ordinary users with clean funding sources who buy and hold coins solely for personal daily consumption and normal investment activities. Furthermore, all methods detailed in this article are known to Sister Sa's team during the process of providing legal services to clients. Sister Sa's team has no financial ties to the channels involved, and the opinions expressed are solely personal and for reference only.
01. Hong Kong Licensed Crypto Exchanges + Brokerage Channels to Cash Out U
Currently, the list of licensed crypto asset exchanges (or operating entities) announced by the Hong Kong Securities and Futures Commission has reached as high as 7, with 4 licenses released at once just a few days ago, demonstrating the prosperity of crypto assets development in Hong Kong.
According to Sister Sa's team's practical experience, currently, cashing out U via Hong Kong channels is indeed a legal and compliant method with low legal risks. However, it is important to note that current crypto assets like USDT cannot be traded directly on licensed exchanges and need to be facilitated through BTC/ETH spot channels. Specific operations, taking HKVAX as an example.
Behind HKVAX is the established brokerage 'Victory Securities' (stock code: 8540.HK), a fully licensed brokerage in Hong Kong. Before entering the crypto asset market, it already held licenses 1, 2, 4, 6, and 9. In 2023, it obtained licenses for crypto asset trading, consulting, and asset management services from the Hong Kong Securities and Futures Commission. Therefore, it can legally use Hong Kong's BTC/ETH spot channels to help users convert U into BTC, ETH, or other fiat currencies, with a very short transaction cycle that is generally unaffected by market financial risks. After the exchange, funds (in HKD or USD) will be deposited into a Hong Kong bank account.
The advantage of this method is that it has better compliance for cashing out U, with clear funding pathways and a lower likelihood of receiving stolen funds, essentially eliminating the risk of card freezes. However, it also has disadvantages. Firstly, current residents of mainland China cannot directly open crypto asset trading accounts, and this channel may require reliable overseas friends or relatives to provide assistance. Secondly, this method of exchange may require physical travel to Hong Kong (to open a bank account, etc.), which is cumbersome and inconvenient for small amounts of U.
02. Major exchanges like Certain An and Certain K can sell through OTC methods.
This method has the lowest cost, and you can operate by opening an account yourself. However, it should be noted that this channel has now become one of the easiest ways to receive illicit funds. Receiving illicit funds not only risks freezing bank cards and making funds unusable but may also lead to subsequent confiscation by our judicial authorities.
If you choose this method to cash out U, Sister Sa's team suggests reviewing the trading platform's transaction records and evaluations of the counterparty, selecting a reputable counterpart for transactions, and avoiding those with poor trading reputations and significantly abnormal transaction records.
03. Converting U with U Cards
Regarding the compliance of U card, Sister Sa's team has specifically published an article to explain:
Sister Sa's team | Can ordinary people use U cards? Will U card issuers run into trouble?
Overall, the issue is not significant. Some U cards can even be linked to WeChat, a certain yellow kangaroo app, or a certain blue wallet app for usage.
However, U cards also carry risks. Currently, the most common are Mastercard or UnionPay U cards, which have relatively safe funding sources. However, there are too many card issuing agents, so one should choose a reliable agent that can pass KYC. Some U card service providers have indeed abruptly ceased services. Sister Sa's team has received inquiries this year from several partners, stating that their previously established U card service providers suddenly stopped servicing users from mainland China a few months ago, leaving them with frozen funds and causing many troubles.
04. Exchanging U through Coin Dealers
Regarding the risks of currency exchange with coin dealers, most risks are similar to those of OTC withdrawals from exchanges, with the same possibility of receiving illicit funds that could lead to card freezes or being summoned as a witness. In fact, Sister Sa's team has handled extreme cases where individuals were investigated as suspects (accomplices) for repeatedly exchanging money with coin dealers.
Overall, the risks associated with coin dealers are relatively high. One should not easily trust so-called 'card freeze guarantees' or 'card freeze compensation' propaganda. Unless there are very reliable partners with a solid background, one should avoid this path to cash out U.
05. Offline U Exchange in Hong Kong
This path generally requires a bank card from abroad (Hong Kong is acceptable). During case handling, Sister Sa's team accompanied clients to Hong Kong to observe the U exchange process at various offline small shops.
There are two types of physical stores in Hong Kong: one is ATMs, and the other is offline small shops. Generally, these small shops do not register customer information for daily transaction amounts below 120,000 HKD; transactions can be made freely. For transactions exceeding 120,000 HKD, simple KYC is required, and the handling fee usually fluctuates around 4%.
Overall, Sister Sa's team believes that for ordinary users with clean funding sources who buy and hold coins only for personal daily consumption and normal investment activities, it is indeed a low-cost and convenient channel. However, there is also a risk of receiving illicit funds. It is advised to exchange at more stable and long-established stores in places like Mong Kok or Tsim Sha Tsui to prevent unexpected incidents.
06. Final Remarks
It is important to note that there is currently no so-called 'completely safe' or 'flawless' way to cash out U. Even the centralized solutions provided in this article still carry risks such as receiving illicit funds and high transaction costs. Partners are advised to consider carefully before taking action and avoid making rash decisions.
