PANews has published an article by lawyer Shao Shiwei on the legal boundaries around acting as an agent for VCC virtual credit cards and U cards in mainland China. Shao, writing from the perspective of a criminal lawyer working in the crypto field, said retail traders and USDT dealers are frequently caught up in cases where bank cards are frozen after receiving illicit funds, or where they become entangled in money laundering-related criminal matters. That has made one question especially prominent in the market: how to avoid having a bank card frozen when selling USDT.
The article frames VCC virtual credit cards and U cards as products that emerged in response to that demand, then asks whether acting as a domestic agent for such cards can really be considered a lawful business.
Four common misconceptions highlighted in the article
Misconception 1: If the issuer is legitimate, the agent is safe
Shao wrote that many content creators and KOLs promoting U cards on Chinese and overseas social platforms stress that the issuer they represent is a large listed company with licenses or qualifications granted in jurisdictions such as the United States and Canada. They may also present due diligence materials on the issuer to reassure users that the card comes from a formal company and does not carry risks such as misappropriating user funds or disappearing.
The article says that point does not settle the legal question in China. An issuer being compliant or licensed abroad does not automatically make issuance, promotion, or sales of the product lawful within China.
Misconception 2: Good after-sales service and customer relations are enough
According to the article, domestic U card agents function as promoters and marketers for overseas issuers, while dealing with users as merchants that sell cards and provide consultation and pre-sale, in-sale, and after-sales support.
Shao gives an example involving KYC. If the issuer requires an overseas mobile number to receive a verification code and a mainland user does not have one, an agent may help contact customer service and assist the user through the process.
Misconception 3: Selling cards is legal because it is not OTC crypto trading
The article notes that USDT dealers who profit from bid-ask spreads in virtual currency trading face legal risk because high-frequency transactions can expose them to illicit funds, whether the spread is above market or roughly in line with market pricing. On that basis, some U card agents believe they are in a different category because they only sell physical or virtual cards and do not participate in OTC trading.
Shao argues that this view is not reliable. Even if an agent does not directly exchange virtual currency, that alone does not remove legal exposure tied to the business.
Misconception 4: Promotion on overseas social media avoids the problem
The article says some agents, aware of the sensitivity of virtual currency activity in China, move their marketing from domestic platforms such as WeChat Moments, Douyin, and Bilibili to Telegram, Twitter (X), and YouTube.
To widen reach and build influence, some also create Telegram groups where users can discuss card usage issues among themselves, allowing questions to be answered by other group members even when the agent is offline.
Chinese policy remains central to the legal analysis
Shao wrote that any business connected to virtual currency in China must be assessed against domestic policy rules. Citing the “924 Notice” and the “26 Notice,” the article says that “virtual currency-related business activities are illegal financial activities” and that parties may not provide “online business premises, commercial display, marketing and promotion, or paid traffic services” for such activities.
On that basis, the article argues that even if an overseas U card issuer is allowed to operate in its home jurisdiction and holds relevant licenses, that does not mean issuance, promotion, or sales of U cards inside China are lawful. Acting as a U card agent in China may be viewed as providing commercial display or marketing services for virtual currency-related business activity, which in turn creates policy and legal risk for the agent’s operations.
Shao adds that market demand in China remains large, so many people are still tempted to enter the business. Some believe that if they maintain customer relationships well and avoid complaints, they will be fine. Others shift promotion and communication to overseas platforms or encrypted messaging apps such as Telegram. The article says those steps do not necessarily remove the underlying risk.
User disputes can escalate into police reports and criminal scrutiny
The article says agents cannot fully control whether users encounter problems in practice or whether those problems can be resolved properly. If user funds are withheld after a top-up and the actual operator is located overseas, mainland users may find it difficult to pursue remedies abroad. In that situation, they may turn to the domestic agent for accountability or report the matter to public security authorities.
Once a criminal report is filed, Shao says there is uncertainty over whether police may investigate the agent’s business conduct under rules such as the “924 Notice,” or even pursue criminal liability on charges including illegal business operations. The article adds that an agent’s failure to participate in fund exchange or control user assets directly does not by itself rule out criminal risk.
Risk can also arise from how buyers use the cards
Shao wrote that although U card agents sell the cards themselves rather than directly handling virtual currency trades, they cannot ensure that every buyer is purchasing for personal use.
The article says some users may use U cards not for ordinary consumption but to provide virtual currency exchange or cash-out services for others, earning a spread or charging a fee. One example given is that after the parties agree on an exchange rate between virtual currency and renminbi, one side receives another person’s USDT and then uses a U card to withdraw cash and deliver RMB. If the virtual currency involved comes from upstream criminal activity, those participating in the exchange and cash-out process may face criminal exposure for concealing or disguising criminal proceeds.
Whether the agent that supplied the U card could also bear criminal responsibility in such a case depends, the article says, on specific facts including whether the agent knew about the unlawful activity and whether the agent provided substantial assistance.
Group-based promotion may trigger information network crime concerns
The article also tells agents to pay attention to risks related to the crime of illegal use of information networks. Some agents promote products by creating WeChat groups or Telegram groups. If those groups are used for fraud, money laundering, or other unlawful activity, whether the group creator or administrator bears criminal liability would depend on factors such as their subjective knowledge, the group’s actual use, and their specific management conduct.
Shao’s conclusion: do not target mainland China users
The article closes by stating that virtual currency-related business activities are characterized in China as illegal financial activity. It also says that in judicial practice, some U card platforms have already faced criminal prosecution on suspicion of illegal business operations. Against that backdrop, Shao writes that even agents who do not directly participate in virtual currency exchange may still be treated by judicial authorities as participants in related crimes because of their agency, promotion, or sales conduct, and may even face allegations of joint crime.
From the standpoint of criminal risk prevention, Shao said he does not recommend that U card agents conduct agency, promotion, or sales business targeting users in mainland China.
The article includes a final note stating that it is an original piece by Shao Shiwei, reflects only the author’s personal views, and does not constitute legal advice or a legal opinion on any specific matter.
