What are the compliance risks associated with using Traveler’s overseas version of USDT for payments

By the end of 2025, when stablecoin applications become more widespread, the boundaries between Web2 and Web3 will once again be broken. Recently, Trip.com’s overseas version officially supported stablecoin payments, allowing assets like USDT to be used directly for booking flights and hotels. This feature quickly became a hot topic among digital nomads. For users, this represents a crucial step in integrating blockchain assets into everyday transactions. For the industry, it indicates that stablecoins are moving from being mere settlement tools to being utilized in high-frequency, real-world consumption scenarios. The practicality of encrypted payments is being revalued by the market.

Introduction

I believe that practitioners in the mainland are much more excited about this kind of “real-world application” than those who use USDT cards. Lawyer Deng Xiaoyu, as a member of Trip.com, is very pleased with this development. However, he believes it’s important to remind digital nomads to ensure compliance during their use, so as to support the growth of innovative companies.

Why did Trip.com’s overseas version’s support for U payments cause such a big stir? Besides the so-called “freedom of payment,” there’s actually a very clever economic strategy behind it.

First, there’s the “natural discount” caused by exchange rate differences. In the OTC market for stablecoins, there often exists a “mirror effect” or price fluctuations between the exchange rates offered by stablecoins and those set by banks. By obtaining cheap stablecoins through specialized OTC channels, users can often purchase high-end accommodations at prices 5%-10% lower than the market rate.

The next point to consider is avoiding the “fees” and “limits” associated with cross-border payments. Traditional credit cards for cross-border transactions incur a currency conversion fee of 1.5%-3%, and there are also annual limits on foreign exchange transactions, which can reach up to $50,000. Using stablecoins for payments not only allows assets to be transferred across borders, but also avoids the complex compliance checks imposed by banking systems. For Web3 professionals or individuals with high net worth who possess a large amount of USDT, this isn’t just about making purchases, but also about leveraging the liquidity of their assets. However, these so-called “arbitrage opportunities” and “payment advantages” actually represent a lucrative target for regulators. Therefore, before clicking “Confirm Payment,” it’s important to read this guide to avoiding criminal risks in various scenarios.

Scenario one: Purely personal consumption

If the USDT in your possession comes from legal sources (such as early mining or investments made through legitimate exchanges), and you use it solely for booking rooms or purchasing tickets while traveling abroad, then this falls under “personal consumption.”

Although this behavior may seem harmless, from the perspective of Chinese foreign exchange regulations, it represents a logical chain of transactions: “Renminbi → Virtual Currency → Foreign Currencies → Meal and Drinks.” In essence, this constitutes a form of “double trading” between domestic and foreign funds, allowing for indirect conversion between Renminbi and foreign currencies.

Although small, occasional transactions for personal use are generally not considered criminal offenses in legal practice, they still constitute violations of foreign exchange regulations at the administrative level. If the amount involved is significant, the fines imposed by the Foreign Exchange Administration could be much higher than the cost of your hotel accommodation.

Another real risk lies in the “dangerousness” of the source of funds.

The most critical issue with Web3 payments is that it’s difficult to ensure that the USDT in your possession is completely clean. If you purchase USDT through OTC channels, and the funds used for payment involve illegal activities such as fraud or gambling, then what you’re actually paying the platform is “dirty USDT”. The police will trace back to the source of the USDT, and once the payment behavior is detected, not only will you be unable to stay in hotels, but all your bank accounts, WeChat accounts, and Alipay accounts may also be frozen.

In criminal investigations, proving that your actions were purely for booking accommodation can be extremely difficult and time-consuming.

Scenario two: Acting as an agent to book accommodations for others and making a profit

If you find that using stablecoins for payments results in exchange rate differences or discounts, and you take advantage of this to post posts on social media, helping others book hotels or flights and earning money in RMB, then the nature of your behavior changes fundamentally. Once your actions become repetitive and aim to make profits, they no longer constitute simple consumption; they become “business activities”.

According to the “Interpretations of Several Issues by the Supreme People’s Court and the Supreme People’s Procuratorate regarding the handling of criminal cases related to illegal fund payment and settlement operations, as well as illegal foreign exchange transactions,” those who engage in illegal fund payment and settlement operations or illegal foreign exchange trading, with an illegal business turnover of over 5 million yuan or illegal gains exceeding 100,000 yuan, are considered to have committed the crime of illegal business operations. You may think that you are simply taking advantage of the platform, but in the eyes of regulators, you are essentially using virtual currencies as a medium for illegal underground banking activities. This kind of “professional fake trading” behavior directly falls under criminal prosecution. In addition, “price manipulation” often indicates some kind of dishonesty. If you offer USDT trading services at prices significantly lower than market rates, judicial authorities will assume that you were aware from the beginning that the sources of these USDT were irregular. In such cases, every fee you charge for these services could be considered as helping the black market to transfer funds. What you face then is not just illegal business operations, but also possible charges related to concealing or hiding criminal proceeds, or aiding in illegal activities. The cost of such criminal risks cannot be covered by mere trading commissions. How can one remain “compliant” in the Web3 era? Technological advancements bring convenience, but laws always ensure the safety of cross-border financial flows. To help Web3 users enjoy the benefits of technology without risking legal issues, Lawyer Mankin offers the following advice: For users who use the service for personal consumption, it is essential to adhere to the principle of “de-financialization.”The name of the payment account, the name of the Ctrip order, and the name of the actual guest staying at the hotel must be highly consistent. Never use someone else’s account to make payments on your behalf, as this kind of mismatch in identities can be very difficult to explain during legal investigations. Additionally, you must keep complete evidence proving that your funds are legitimate.

If the stablecoin you paid for was purchased through a licensed exchange with verified identity, be sure to save screenshots of those transactions. In case your bank account is frozen or you face criminal charges, these screenshots will serve as crucial evidence to discredit any suspected criminal involvement.

Furthermore, the water bills and flight tickets after you check into the hotel are also important evidence. They prove that your payments were made for genuine purchases, not for illegal currency transactions.

2. For those who try to profit from exchange rate differences, our advice is simple: stop immediately.

Publishing advertisements for “U代订” services on domestic social platforms is not only likely to lead to criminal charges, but it can also make you a tool for money laundering. Do not accept any RMB from strangers; instead, let them pay using UPay, because you never know how many victims are involved behind that amount of RMB.

Remember, cheap UPay often comes with high criminal consequences. Never try to convert illegal UPay into legitimate currency through refund schemes.

Platforms like Ctrip’s overseas version are equipped with sophisticated anti-money laundering systems. Once such incidents are detected, your Web3 assets and domestic bank accounts will be temporarily blocked. In severe cases, you might even be listed on the international anti-money laundering blacklist.

In conclusion,

The dream of Web3 digital nomads is truly beautiful: to sit by a pool in Chiang Mai, using stablecoins to book a flight to London, and start a journey anytime, anywhere. Ctrip’s overseas version supports UPayments, which indeed brings us one step closer to achieving true payment freedom.

But as lawyers, we have seen too many cases where families were forced to freeze their bank accounts due to greed for small exchange rate benefits. The cost of this “smoothness” often comes at the expense of being unable to prove innocence in late-night inquiries.

We do not recommend combining Web3 assets with real-life financial assets. Nor do we recommend using your own resources to help friends with their travel arrangements, as this could lead to serious criminal charges. Life should remain what it is; let coins stay in wallets, and compliance remain in minds.

After all, every trip ends with a safe return home—only then can that flight truly matter.

Don’t let a seemingly smooth payment turn into a lengthy criminal investigation.