Over the past two years, the more we have spoken with crypto payment teams, the more we have found that their questions overlap to a high degree.Can this business be carried out? What licenses must be applied for? Which customers may be served? How should bank connectivity be established? If something goes wrong with the funds, who bears liability?
Entrepreneurs ask these questions, traditional payment companies undergoing transformation ask them, and investors ask them as well. Before answering each time, we first break the business down: what is collected, what is paid out, which countries and regions are served, which entities the funds pass through, and who promises customers that payment will be completed.
The answer is often not a simple "yes" or "no," but depends on how the business is specifically structured and operated.
Accordingly,Attorney Shao Jiadan of Mankun Law Firm, drawing on legal service practice in the payment and crypto payment fields, has systematically organized these frequently asked questions into100 Questions on Crypto Payments, which has now beenofficially launched on the Mankun Law Firm website。
How can these 100 questions be used?
100 Questions on Crypto Payments does not simply list questions by license name or country or region. Instead, following the path of a crypto payment institution from business preparation and product launch to ongoing operations, it is divided into ten parts.
First, determine whether the business can be undertaken
Whether the business can be carried out
Which services may require a license? Is providing only technical interfaces a regulated business? Can we begin trial operations first and then apply for a license?
Location, licensing and investment
How should the company's place of incorporation be chosen? What are the differences among MSB, VASP and CASP? How much time and investment does applying for a license require? Should we apply ourselves or acquire a licensed company?
Access to major markets
Outline the market access pathways for the United States, Canada, Hong Kong, the European Union, Singapore, Australia, Switzerland, the BVI, the Cayman Islands, Dubai and Abu Dhabi.
Common questions from China-backed institutions
After obtaining an offshore license, can the institution serve clients in mainland China? How should domestic marketing, team employment, cross-border settlement, payroll payment and tax issues be handled?
Then resolve how the product can be implemented
Banks, channels and cooperation models
Once a license has been obtained, why might it still be impossible to open an account? Under white-label, client referral or cooperation with licensed institutions models, how are responsibilities allocated?
Merchant payment collection and cross-border payments
Which merchants can be served? How should corporate payments, card-based crypto purchases, chargeback risk and on-chain settlement be handled?
Wallets, U cards and new products
Do self-hosted wallets require a licence? What should be noted when integrating third-party fiat on-ramp and off-ramp services, launching U cards, offering balance yield or AI-agent payment functions?
Finally, how the business can operate on a long-term basis
Anti-money laundering, customers and data
How should customer identification, transaction monitoring, on-chain risk management and sanctions screening be carried out? When using overseas services, how should data and tax information reporting be handled?
Fund security and allocation of liability
When a stablecoin depegs, assets are frozen, a wallet is hacked or an upstream party ceases settlement, what liability may the platform, its counterparties and management respectively bear?
Remediation, growth and legal advice
If a business has already operated without a licence for some time, can it be remediated? When adding new markets, new products or new currencies, is a new licence application required? And what issues should be resolved before financing or M&A?
Whether you are preparing a new project or have already reached the account-opening, operational or market-expansion stage, you can go directly to the relevant section based on the issues you are currently facing.
Start from the specific business and understand the compliance requirements
Likewise, where stablecoins are collected for merchants and then settled in fiat currency, who collects the coins, who arranges the exchange, and who is responsible for the final receipt of funds may correspond to different regulatory requirements. This is also an issue that Crypto Payments 100 Questions repeatedly focuses on:To determine whether a business can be carried out, it is first necessary to clearly identify what role the platform actually assumes。
For example, some teams believe that if they only charge technical service fees and do not earn exchange spreads, they do not need to consider licensing. However,the fee model alone cannot determine the nature of the businessIf the platform actually completes exchanges, transfers funds, or safekeeps assets on behalf of customers, then even if the income is called a "technical service fee," the corresponding regulatory requirements may still apply. What truly needs to be clarified is whether the customer is purchasing a software tool or a payment service performed by the platform.
The choice of license also needs to return to the specific business.For teams with limited budgets, application costs and processing speed are certainly important, but what is more worth confirming first is whether the qualification can support the markets where the first batch of customers are located, as well as the product features planned for launch. If a license cannot cover the actual business activities, then no matter how quickly it is obtained, it may not necessarily help the project launch. Therefore, Crypto Payments 100 Questions places application investment together with issues such as staffing, bank access, and ongoing maintenance, to help teams assess whether a path is truly suitable for them.
After obtaining a license, there are still issues to be resolved in implementing the business.Banks will review the customer type, source of funds, business regions, and risk management capabilities in accordance with their own risk policies, and will independently decide whether to accept an account opening. If the license application materials, account opening materials, and the description of the business in the actual product are inconsistent, the bank may require further explanation. Teams need to make it clear to counterparties whom the company serves, where the funds come from, which stages they pass through, and how the relevant risks are managed.
For teams with a Chinese background, the relationship between overseas qualifications and the boundary of business in mainland China also needs to be assessed separately.An overseas company obtaining a license does not mean that it may use it to conduct the relevant business with customers in mainland ChinaPlacing servers, receiving accounts or contracting entities outside the jurisdiction does not replace the review of market-access requirements and prohibitive rules in mainland China. The markets in which a business operates determine the rules against which it must be assessed.
These questions are also the starting point for the Crypto Payments 100 Questions compiled by Lawyer Shao Jiadian. Each question seeks to provide a concise conclusion first, then explains the specific conditions that affect that conclusion and what the team needs to confirm next. It is hoped that readers, while learning about licensing and regulatory requirements, will also identify aspects of their own business arrangements that have not yet been fully thought through.
When reading, you can review your own product and transaction flows item by item against the customer's location, the services provided, the flow of funds and the allocation of responsibilities.In this way, the 100 Questions can serve both as a reference during project preparation and as a tool to help teams identify the issues that require further discussion before engaging with banks, selecting partners or expanding into new markets.
Please note before use
Regulatory rules in the crypto payments sector continue to evolve. The content of Crypto Payments 100 Questions reflects the compilation as of the time of publication; specific requirements in different countries and regions should be governed by the latest local laws and regulatory positions.
This Q&A is intended for general research and information sharing and cannot replace formal legal advice rendered on the basis of complete business facts. If your business involves specific markets, licence applications, fund arrangements or cooperation structures, you are welcome to contact us through the Mankun Law Firm website.
Reading access:www.mankunlaw.com
