In recent years, with the rapid development of the cryptocurrency ecosystem, various types of overseas crypto prepaid cards (commonly known as "U-Cards") have been frequently discussed in investment circles. Many Web3 Participants view them as convenient tools for cross-border consumption and capital mobility, and some even believe U-Cards can "conceal assets" or achieve "tax evasion". However, based on the current international tax regulatory environment and the structural features of U-Cards, attempting to evade taxes through U-Cards is not only infeasible but may also lead to more serious tax, compliance, and even criminal risks.

This article will systematically analyze the "U-Card Tax Misconception" from the perspectives of U-Card operational mechanisms, tax logic, and the compliance environment, helping Web3 Participants establish correct cross-border tax awareness.

Part One: What Exactly is a U-Card?

U-Cards are typically issued by offshore banks, crypto payment companies, or third-party institutions in partnership with Visa/Mastercard. Web3 Participants top up the card account with stablecoins such as USDT. The system completes the settlement of the crypto asset into fiat currency in the background, allowing the user to make global purchases or withdraw cash from ATMs using the card.

Although the U-Card purchase process involves on-chain USDT, once the funds enter the card system, they are entirely converted into records within the traditional financial system. The consumption behavior is fully recorded in the databases of Visa/Mastercard or the clearing bank, possessing entirely centralized and traceable characteristics. The essence of the U-Card is still a centralized prepaid card.

Part Two: Why U-Cards Can't Be Used to Evade Tax

1. All Transactions Are Recorded by the Payment Network

Every single transaction, cash withdrawal, and top-up on a U-Card is fully recorded by nodes like Visa/Mastercard, the acquiring bank, and the issuing bank. Tax authorities do not need to trace on-chain data; they can obtain user behavior simply through the payment network's reports. In other words, using a U-Card is essentially no different from using an ordinary overseas prepaid card, and "anonymity" is more of a marketing concept than a technical reality.

2. Cross-Border Tax Information Transparency is Soaring (CRS)

Over 100 countries have joined the CRS Automatic Exchange of Information mechanism. Whether it's a bank account, prepaid card account, or financial asset, as long as it's linked to a user's identity, it may enter the automatically exchanged data package. Recent user reports that OKX requires CRS information for withdrawals also indicate that crypto institutions are gradually being incorporated into the global regulatory framework. Against this backdrop, hoping to hide the flow of assets through a U-Card is unrealistic.

3. Large Transactions Will Definitely Trigger Enhanced KYC Scrutiny

U-Card issuers generally conduct extra audits—and may even freeze usage rights—for scenarios like large-amount top-ups, frequent ATM cash withdrawals, huge expenditures in different locations, and funds flowing in from multiple sources, requiring the customer to explain the source of funds. Therefore, if a user attempts to evade tax by topping up a large amount of USDT onto the card, it is more likely to trigger scrutiny instead.

Part Three: Other Hidden Risks of U-Cards

1. Foreign Exchange Control Risks

In countries with strict foreign exchange management, even if a U-Card has no limit, topping up a large amount of funds to an offshore card may be deemed illegal capital outflow.

2. Legal Risks Due to Unclear Cryptocurrency Regulation

For instance, in China, frequent high-value use of a U-Card for cash-out activities may be classified as illegal business operations or money laundering , posing extremely high risks.

3. Issuer Credit and Rug-Pull Risks

Since the U-Card funds nominally belong to the issuer, non-compliant issuing crypto payment companies face rug-pull risks, meaning the user's fund security cannot be fully guaranteed. The halt of Infini Card services is a typical example.

Part Four: Advice for Web3 Participants

For Web3 Participants who wish to manage their funds securely:

1. Do not rely on U-Cards for tax evasion purposes

Tax risks are far higher than imagined, and relevant records are extremely easy to trace.

2. Reasonably plan the disposal path of crypto assets

Choose tax-friendly and compliance-transparent jurisdictions for asset management.

3. Build cross-border asset compliance awareness

Global tax transparency will only increase in the future, and any attempt to conceal assets through structural evasion will become increasingly infeasible.

Conclusion: The U-Card is Never a Tax Evasion Tool, but a Tax Risk Multiplier

Many Web3 Participants misunderstand the U-Card as an "anonymous bank card in the cryptocurrency field," but its essence is still a prepaid card product covered by the global regulatory system. In an era where systems like CRS, anti-money laundering, and cross-border payment tracking are becoming increasingly strict, any form of "concealed asset movement" will face extremely high risks. Web3 Participants should proactively establish a compliance mindset and conduct cross-border tax planning professionally, rather than relying on centralized tools like U-Cards in the hope of evading regulation.