Building Fansted to $10M in Payouts: What Compliance Took From Me Before It Gave Anything Back

I started a public series about building Fansted to $10M in payouts.

Not revenue.
Payouts.

That distinction matters. $10M in payouts means creators earn $9M, and Fansted earns $1M as a 10% take. Confusing the two isn’t just sloppy language—it’s how you end up misunderstanding your own business and alarming everyone who touches money for a living.

I made the series public for accountability and brand. If I’m going to be the CEO and the face of Fansted, the journey shouldn’t happen in private. People should see how the product is built, how decisions are made, and where things break. That visibility worked. Attention followed. Interest followed. So did scrutiny.

Before Fansted, my understanding of compliance was shallow. Compliance meant prohibited content, nothing more. Everything else—marketplaces, Merchant of Record, settlement flows, KYC, AML—sounded like formalities. Terms people recited but didn’t really live by. I assumed we’d clean it up later.

That assumption was wrong.

The first real signal wasn’t dramatic. It wasn’t a fine or a warning call. It was an email asking us to submit our documents for review: policies, terms, acceptable use, business structure. That’s when the ground started to shift.

The truth is simple: we used our PSP incorrectly.

We operated like a marketplace without understanding what that legally implied, and we made it worse by inverting the money flow. Subscribers paid, and creators were settled directly through automatic splits at the PSP level. Funds never touched Fansted first. No central control. No proper settlement layer.

That ran for 28 days.

During that time, we had no creator KYC, no real due diligence, weak legal documents, vague policies, and instant payouts. Refund risk sat mostly with the platform. From the outside, it looked reckless. From the inside, it felt like speed.

Speed is expensive when money is involved.

What triggered deeper scrutiny wasn’t volume or fraud. It was wording. Our legal documents and marketing copy didn’t clearly define who we were, how money moved, or who bore risk. To a compliance team, that ambiguity smells like danger. They don’t optimize for intention. They optimize for containment.

Then the email came.

Our PSP terminated the account. Immediate shutdown. No runway. No soft landing. Just a note saying that if we could present a business that clearly fit within their policies, they’d be open to revisiting the relationship.

That moment felt final. Not emotionally dramatic—just mathematically bleak. Payments are oxygen. When they stop, everything else becomes theoretical.

The cost showed up quickly. We lost time. We lost momentum. We lost money. About $500 was locked up—funds meant to be our first meaningful creator payouts through a partnership. The amount wasn’t the real damage. The signal was. Trust erodes fast when payouts fail.

One thing became clear: you don’t get to be vague about what you are.

Fansted had to choose. Marketplace or Merchant of Record. No hybrids. No “we’ll refine it later.” We chose Merchant of Record, and that decision forced everything else into place—money flow, liability, refunds, compliance posture, and who regulators come for when something breaks.

This experience collapsed one illusion permanently: code is not the business.

Code is maybe 5% of running something real. The rest is legal structure, compliance posture, marketing language, sales mechanics, and risk ownership. If you focus only on code, you’re building on assumptions you haven’t tested—and compliance will test them for you.

I don’t see compliance as a tax anymore. I see it as a moat. Most people can’t endure this layer. It’s slow, uncomfortable, and exposes how little you actually understand about the system you’re operating in. That’s why so few survive in payouts, fintech, or marketplaces.

Would I still build Fansted knowing this upfront? Yes. Without hesitation. But I’d start compliant from day one—not perfect, just defensible.

If there’s advice I’ve earned the hard way, it’s this: your PSP is not your partner. All your partners want you to bear the risk. If you don’t define your platform precisely, someone else will do it for you, and you won’t like the outcome. Register your company early—absurdly early. Treat compliance like architecture, not paperwork.

I’m writing this for founders, and for future me. To document the cost of ignorance. To teach without pretending mastery. To remember that surviving this layer is the real work.

We’re still building. We’re still aiming for $10M in payouts. The difference now is simple.

We know what we’re standing on.