VCC Virtual Card with Crypto Assets: Compliance Pitfalls Behind Convenience

Recently, I've seen many people using virtual credit cards ( VCC ) for cross-border payments, especially those that can be topped up with USDT, which feels very convenient. But here comes the question— is this operation compliant or not? What are the risks?

What is VCC?

In simple terms, VCC is a digital version of a credit card. There is no physical card; it only exists in your mobile app, with a card number, expiration date, and security code, functioning just like a real card. Banks, payment companies, and fintech can issue them.

Some VCC platforms now support USDT deposits, which sounds great—directly using stablecoins to deposit, converting to USD, and then shopping with USD. But the actual process is: you deposit USDT → the platform converts USDT to USD → USD is credited to VCC → then you can spend it. The platform also charges a service fee.

Hidden Legal Bombs

1️⃣ Risks of unlicensed operation

Many VCC issuers only have local licenses but operate without authorization in other countries and regions. This is illegal in China and constitutes “engaging in payment settlement business illegally.” According to the “Criminal Law,” illegal payment settlement exceeding 20 million yuan or illegal gains exceeding 500,000 yuan can lead to criminal charges.

This is why certain VCCs cannot be used under Chinese IPs—there is simply no domestic license.

2️⃣ The Black Hole of Capital Drainage

The funds deposited in VCC accumulate in the platform account before consumption. If the platform uses this money for high-risk investments and fails, or simply runs away, the users' money will be gone. Legally, this is called “illegal absorption of public deposits.”

The USDT you deposit is nominally a “prepayment”, but the actual control is in the hands of the platform - this is where the risk lies.

3️⃣ Anti-Money Laundering Vulnerability

Some VCC platforms have very loose KYC procedures, and some even support anonymous applications. Coupled with the ability to deposit cryptocurrencies, anonymity skyrockets, making it a hotbed for money laundering.

There have been news reports: hackers used virtual cards to transfer illegal gains, and the platform could not trace the individuals at all.

4️⃣ Foreign Exchange Control Risk

RMB → USDT → VC → USD consumption, this process is to evade China's foreign exchange control policies.

Does the VCC provider know you are doing this and still continue to cooperate? Legally, this may involve “aiding and abetting information network crimes.”

What should the platform do?

If you are the VCC issuer To live with peace of mind, you must do the following:

1. Obtain a license first — Don't be lazy, every country requires applying for a formal financial license.
2. Strict KYC/KYT — Real identity verification + Transaction behavior monitoring, don't let dirty money mix in.
3. Establish a Trading Monitoring System — Real-time marking of high-risk transactions (frequent address switching, short-term large amounts, etc.)
4. Internal Control System — Train employees to prevent insiders from misappropriating client funds
5. Data Security — User information and financial information must be encrypted to prevent information leaks that could lead to fraud.

Final Words

For users: VCC is indeed convenient, but it is important to recognize whether the platform actually has a license and is regulated. Especially those that allow cryptocurrency deposits carry a higher risk factor. Once something goes wrong with the platform, your money is likely to be lost.

For regulatory authorities: This is a new type of financial risk that requires close attention. The combination of VCC+ cryptocurrency is particularly prone to being used as a tool for evading foreign exchange controls and money laundering.