Compliance risk remains the biggest obstacle for the U Card.
Written by: Wu Says Blockchain
The content of this article is a compilation of publicly available information and does not represent the views of Wu Says. It does not provide any investment advice. Readers are advised to strictly comply with the laws and regulations of their location and not to participate in illegal financial activities.
In early June, Infini's founder was still promoting the U Card in interviews, but just a few days later, a sudden announcement was made to cease operations, sparking significant discussion:
On June 17 at noon, Infini suddenly announced that it had decided to stop the services of the Infini Card. Effective immediately, the Global Card, Lite Card, and Tech Card will all be suspended from use and new applications. We sincerely apologize for the inconvenience this may cause. Core functions such as recharge, withdrawal, and Earn earnings will not be affected, and your asset security is controllable. To properly handle this change, we will automatically refund the actual card opening fee (after deducting any form of discount) to the Infini account balance of all affected users who have applied for cards. The card opening fee will be credited within 10 working days, and no manual operation is required from you. Refunds in transit will be returned to your Infini account, expected to be completed within 5 to 21 working days. Your funds' security is not affected.
Infini co-founder Junzhu explained: Infini will no longer engage in to C card business. The reason is that compliance costs are extremely high, profits are very thin, and operations are extremely burdensome. Currently, the to C card business occupies 99% of time and costs, contributing 0 revenue. Wealth management and asset management have become the focus. The current path for crypto cards is still to offramp USDT and USDC and then realize stable to fiat payment paths through traditional payment networks. It is too convoluted, too lengthy, and too expensive. Without subsidies, it is difficult to match the rates and cashback of web2. The U Card is not the ultimate solution for web3 pay with stablecoin. Currently, Infini is a centralized product, and we will fully embrace decentralization in the future. We will think about and embrace decentralized payment solutions. We will absolutely not follow the old path of centralization.
Junzhu also mentioned that when developing the U Card, they sought advice from OneKey, not expecting that the final outcome would be the same as OneKey. The hardware wallet OneKey also launched a U Card but subsequently also abruptly closed its services.
Regarding this service shutdown, there are speculations that it is related to the recent Bewildcard incident. WildCard is a platform focused on providing virtual credit card services, allowing users to easily register and subscribe to overseas services. The platform has particularly optimized the use experience of OpenAI, including automatic registration and upgrading of ChatGPT Plus features. The platform is rumored to be under investigation.
Infini founder Christian introduced the features of the Infini Card in the latest space, including: The Infini Card always focuses on serving the public and retail investors. This was also our original intention when we were founded. Unlike the VIP user-oriented crypto cards launched by exchanges, our card is aimed at ordinary users, making it more friendly and practical. The crypto card itself is actually a "thankless" product, but we always insist on enhancing the experience from the user's perspective. The rates are transparent and highly competitive. Especially in terms of USD denomination, our current card transaction fee is 0.1%, which is among the lowest in the market. We also plan to further reduce costs through more optimization methods and maintain a long-term price advantage. One of the most special aspects is that we provide earning features for the card balance. This is not common in the market. Many users will keep some U (USDT) in the card for daily use, and we provide interest on current wealth management to hedge against wear and tear during consumption. These earnings come from the strategies we are building, which have shown excellent performance in testing, and some strategies are even unique solutions that are hard to find on other DeFi platforms. We are also willing to share these with users.
@knowyourself518 tweeted that for the U Card business, an internal report triggered an investigation, and the fines could far exceed the cost of the license. A heavy penalty could be fatal; if combined with the ambiguity of on-chain fund flows (such as proving the source of funds), compliance costs could rise exponentially. Cases of the U Card being abused by fraud groups are numerous, but the platform lacks the "contract fee" revenue-generating ability of exchanges and is forced to directly bear the risks from retail investors, making long-term operations prone to problems.
The harsh reality is that card organizations/upstream banks will transfer all fines for AML loopholes to the issuing entity, which could result in the loss of the entire deposit or even the revocation of the license—while intermediaries only care about collecting fees. Buying a bank is useless; if the card organization is dissatisfied, the fine subject is the bank, and if the fine is not paid, they will be kicked out of Visa/Mastercard. Therefore, buying a bank does not solve the fundamental problem. The actual costs borne by users are far more than the 1-2% transaction fee: card opening fees, exchange losses, recharge friction… Without subsidies, the average real rate in the industry is 3-5%. Compared to the fee advantages of traditional credit card giants (Visa/MC) under massive transaction volumes, the U Card has no competitiveness in small transaction scenarios. Without significant subsidies, ordinary users will not be willing to pay. The crypto card is a low-margin project that requires a large volume of transactions and asset accumulation to be profitable, and it is very resource-intensive. However, as the scale of business expands, compliance costs and operational costs will significantly increase. Therefore, overall, being able to scale up is key, ideally with synergies with the main business.
It is worth noting that card organizations, upstream banks, and payment channel providers collect fees and fines, while all operational risks (asset management failures, regulatory fines, fraud losses) are borne by startups. This essentially becomes a compliance arbitrage game that exploits Web3 VCs. Therefore, the U Card is not a good business; payment itself is not very profitable, and the strong compliance attributes of C-end finance are not something that startup teams can handle.
Despite Infini's final announcement to exit, the U Card sector remains very hot. On March 14, 2025, RedotPay announced the successful completion of a $40 million Series A financing round, led by Lightspeed, with significant investments from HSG and Galaxy Ventures following their commitment in December 2024. DST Global Partners, Accel, Vertex Ventures (a Temasek-supported venture capital firm), and other investors also participated in this round of financing.
At the June State of Crypto conference, Coinbase announced a partnership with American Express to launch the "Coinbase One Card" credit card, offering Bitcoin cashback and staking rewards. The company is also collaborating with Shopify and Stripe to expand the USDC payment landscape, allowing stablecoins to move from on-chain to physical consumption.
@portal_kay dissected the birth of a U Card, including card organizations, BIN providers, issuing institutions, card program managers, fiat-crypto exchange merchants, and card production & technology integration service providers. In the U Card (virtual credit card or payment tool) ecosystem, the upstream and downstream cooperation relationships have clear divisions of labor, covering the following roles: Card organizations (such as Visa, MasterCard) as the top tier, set rules, build global payment clearing networks, and allocate Bank Identification Numbers (BIN) (the first 6 digits of the card number) to licensed financial institutions. BIN providers (such as Evolve Bank, Railsr) are licensed banks or payment institutions responsible for applying for and managing BINs, reviewing cooperation qualifications, allowing project parties to issue cards, and assisting with regulation and settlement. Issuing institutions (such as REAP, Airwallex) create user card accounts, execute KYC/KYT compliance, hold fiat currency, and process transaction settlements, usually not directly handling cryptocurrencies. Card program managers (such as Bybit Card, Bitget Card) are the core of the U Card project, responsible for product design, user operations, API development, risk control strategies, coordinating KYC with issuing institutions, and marketing with card organizations. Fiat-crypto exchange merchants (such as MoonPay, Circle) handle the exchange of on-chain assets and fiat currency, for example, converting user USDT deposits into dollars in a custodial account. Finally, card production and technology integration service providers (such as IDEMIA, G+D) provide physical card manufacturing or virtual card API integration, supporting wallet bindings like Google Pay and Apple Pay, while modern BaaS companies offer SDK integration solutions. Each role collaborates closely to support the operation and compliance of the U Card business.
Compliance risk remains the biggest obstacle for the U Card. FinTax points out that using the U Card also requires attention to several legal risks. For example, in some countries with strict foreign exchange management, although the U Card does not set a personal limit for withdrawing U, exceeding the foreign exchange quota for outbound funds may also touch upon foreign exchange management regulations. If discovered by foreign exchange management authorities, administrative fines may be imposed, and it could even involve criminal charges. Additionally, the legal status of cryptocurrencies is still unclear in some countries, and some countries completely prohibit the use of cryptocurrencies. In such cases, using the cryptocurrency U Card for transactions may also be deemed illegal. Therefore, before using the U Card, users should understand the basic compliance requirements of their country and region. Furthermore, users should not use the U Card as a tool for illegal activities. For instance, if users engage in high-frequency, large-amount transactions with the U Card or assist others in cashing out, they may also be deemed to be engaging in illegal operations or money laundering activities, facing criminal penalties.
Due to the support for anonymity or minimal real-name requirements, some users hope to evade taxes through the U Card, such as concealing income sources to reduce tax liabilities. However, this behavior of tax evasion through the U Card is actually not feasible. First, although the U Card has a certain degree of anonymity, most U Cards still rely on international payment networks (such as Visa, Mastercard). These payment networks record detailed data for each transaction, including transaction amounts, merchant information, transaction times, etc. Therefore, tax authorities can still track the flow of related funds through these transaction records. Secondly, for cross-border transactions, tax authorities can also track cross-border fund flows through foreign exchange monitoring systems, bank information exchanges, and other means. Many countries have signed agreements for automatic exchange of tax information (CRS, Common Reporting Standard), making cross-border fund flows relatively transparent. Through this method, tax authorities can also obtain transaction information related to the U Card. Finally, in actual use, payment platforms may also conduct strict real-name reviews for large transactions. If users are involved in frequent large fund flows, the platform may require additional information such as proof of the legality of the source of funds. Therefore, the behavior of evading taxes through the U Card is actually not feasible and may also lead to tax audits and penalties.
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