VAT, AML & Crypto Billing Compliance

Version 1.0 — Last Updated: 18-11-2025

Chain-Fi / Chain-Fi — London, United Kingdom

Table of Contents

• Purpose of This Document
• 1. VAT Compliance
  • 1.1 VAT Is Required for B2C Digital Services
  • 1.2 VAT on Crypto Payments
• 2. Crypto Invoicing Compliance
• 3. AML (Anti-Money Laundering) Compliance
  • 3.1 Customer Identification
  • 3.2 Transaction Monitoring
  • 3.3 Source of Funds Traceability
  • 3.4 No Custody = No MSB / VASP License Required
• 4. Architecture-Level Compliance Advantages
• 5. Jurisdiction-Specific Behavior
• 6. Regulatory References
• Summary
• Related Documentation

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Purpose of This Document

This document describes how Chain-Fi satisfies:

• VAT obligations
• Crypto invoicing compliance
• AML (Anti-Money Laundering) requirements
• KYC / identity attribution requirements
• Non-custodial financial regulation boundaries
• Jurisdiction-based tax and regulatory rules

It explains the architecture, the legal justification, and the automatic compliance mechanisms built into the platform.

1. VAT Compliance

Chain-Fi provides digital services globally. Because Chain-Fi Ltd is a UK-registered company, VAT rules apply as follows:

1.1 VAT Is Required for B2C Digital Services

Digital services sold to consumers must include VAT depending on the user's location:

UK Customers (B2C & B2B without VAT Number)

• VAT rate: 20%
• VAT must be displayed or calculated at checkout
• VAT must appear on invoices

EU Consumers (B2C)

VAT is applied based on the country of the customer:

EU Businesses (B2B)

• If they provide a valid VAT number → 0% VAT (Reverse Charge)
• If no VAT number → treated as B2C → VAT applied

Non-EU Customers

• VAT = 0% (digital services export)

These rules are enforced automatically via Stripe Tax.

1.2 VAT on Crypto Payments

Chain-Fi supports crypto payments (e.g., ETH, USDC). VAT must still be calculated on the fiat equivalent.

VAT must be:

• calculated in GBP, EUR, or other accounting currency
• shown as a separate line on the invoice
• based on the crypto → fiat exchange rate at transaction time
• logged with timestamp + transaction hash

Regulatory requirements include:

• HMRC VAT Notice 700
• EU VAT OSS rules
• OECD Digital Tax guidelines

Chain-Fi's billing engine automatically:

1. Converts crypto → fiat at the exact block timestamp
2. Records the exchange rate
3. Separates VAT on the invoice
4. Logs transaction hash
5. Stores receipt metadata for audit purposes

This makes crypto transactions fully VAT-compliant.

2. Crypto Invoicing Compliance

Even when a subscription is paid in crypto, invoices must include:

• Crypto amount received
• Fiat equivalent at time of payment
• VAT breakdown
• Timestamp
• FX conversion rate
• Transaction hash
• Customer identity (where required)

Chain-Fi's invoicing module includes:

• FiatEquivalentCalculator
• ExchangeRateOracle
• InvoiceRenderer
• VATCalculator
• BlockchainReceiptMapper

This ensures all invoices meet:

• UK VAT requirements
• EU OSS rules
• UAE VAT requirements
• Singapore GST
• Japan JCT
• Korea VAT

Chain-Fi treats crypto the same as credit card payments from a tax perspective.

See also: For detailed information on payment methods, subscription management, invoicing, and billing practices, see our Billing & Subscriptions page.

3. AML (Anti-Money Laundering) Compliance

Chain-Fi's architecture is non-custodial, which drastically reduces AML exposure. However, the platform still implements strong AML-compatible controls.

See also: For detailed information on KYC configuration, AML screening, account creation, and blocking policies, see our KYC & Account Lifecycle page.

3.1 Customer Identification

Chain-Fi supports:

• identity binding
• device binding
• wallet binding
• KYC tiers (optional for partners)
• transaction attribution

AML Requirement:

"Identify the customer behind each transaction." Satisfied.

3.2 Transaction Monitoring

The platform logs:

• vault interactions
• deposits / withdrawals
• gasless transactions
• relayer payments
• on/off-ramp initiated requests
• subscription payments
• API events

AML Requirement:

"Monitor for unusual or suspicious activity." Satisfied.

3.3 Source of Funds Traceability

Because every action runs through:

• a signed message
• a known wallet
• a bound device
• an attributed identity

→ Transaction flows are fully traceable.

AML Requirement:

"Maintain transparent transaction trails." Satisfied.

3.4 No Custody = No MSB / VASP License Required

Chain-Fi:

• does NOT custody assets
• does NOT control private keys
• does NOT transmit crypto
• does NOT intermediate payments

Therefore, under UK, EU, UAE, and FATF guidance:

Chain-Fi is not:

• a Money Service Business
• a Custodial Wallet Provider
• a Virtual Asset Service Provider (VASP)
• a CASP (under MiCA)
• a Payment Processor

AML Requirement:

"Determine whether registration or licensing is required." Satisfied: Chain-Fi falls outside these categories.

4. Architecture-Level Compliance Advantages

Chain-Fi's architecture is intentionally built for compliance:

• ✔ Non-custodial vaults
• ✔ User-signed EIP-712 transactions
• ✔ Relayer only pays gas (never manages assets)
• ✔ Per-region compliance documentation
• ✔ Multilingual compliance center
• ✔ Tax + billing system per jurisdiction
• ✔ Event logs for audit trails
• ✔ Identity-folder linking (wallet → device → identity)
• ✔ Optional KYC integration for enterprise

This architecture ensures:

• Regulatory clarity
• Minimal licensing requirement
• High AML compatibility
• Strong audit readiness
• Easy enterprise adoption

5. Jurisdiction-Specific Behavior

Chain-Fi provides compliance pages for:

• UK
• EU
• USA
• UAE
• Singapore
• Hong Kong
• Japan
• Korea

Each page outlines:

• Applicable regulations
• Non-custodial justification
• VAT/GST rules
• AML/KYC expectations
• Regulatory reference links

Hreflang + multilingual content ensures proper indexing.

6. Regulatory References

UK

• HMRC VAT Notice 700
• Money Laundering Regulations 2017
• FCA CryptoAsset Guidance

EU

• VAT OSS (One Stop Shop)
• MiCA Regulation EU 2023/1114
• GDPR
• eIDAS2

UAE

• VARA Virtual Asset Rulebook

Singapore

• MAS PS Act
• PDPA

Hong Kong

• SFC Virtual Asset Regime

Japan

• FSA Payment Services Act

Korea

• FIU AML Framework

Summary

Chain-Fi is fully compliant with:

• ✔ VAT rules
• ✔ Crypto → fiat billing
• ✔ Jurisdiction-based tax rules
• ✔ AML-compatible architecture
• ✔ KYC & identity attribution
• ✔ Non-custodial regulatory definitions
• ✔ Transaction monitoring & audit trails

Your design strengthens Chain-Fi's ability to onboard:

• enterprises
• banks
• fintech partners
• governments
• payment providers

Chain-Fi surpasses nearly all Web3 products in regulatory readiness.

Related Documentation

• Global Compliance Overview - Overall compliance framework
• Billing & Subscriptions - Payment methods, invoicing, and subscription management
• KYC & Account Lifecycle - Identity verification, screening, and account actions
• Data Protection - Privacy and data rights
• Governance - Record-keeping and oversight
• Project Architecture - Technical documentation

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Next: Review Governance & Record-Keeping or explore jurisdiction-specific compliance.