Powering the USB input chip

[philipsmarantz]

I have an inexpensive AliExpress kit DAC board which has USB and SPDIF inputs.See some closeups below.
There are two indicator LED lamps on the front, both red: one for main power (5v), and the other is for USB (on). The USB indicator LED is not on when you're just inputting SPDIF, just the single main power led. So, there is no "signal" indicator on this kit. The LEDs are simply power indicators.
Again, note that main input (adapter) jack for this kit DAC is 5Vdc (not 9 or 12 or 15 v)
QUESTIONS:
Must the USB input chip be powered by the USB cable exclusively? This question prompted by the fact that the main adapter power is also 5vdc. Is the separate (computer/sourced-based) power for USB chip related to some sort of USB grounding issue? To experiment, I cut the 5v (red wire) line from my USB cable. The red led light went off on the kit dac. And there is no sound. Re-attach the red-wire in the USB cable, and all normal again.
CM108 USB controller datasheet: https://pdf1.alldatasheet.com/datasheet-pdf/download/158786/CMEDIA/CM108.html

 

[philipsmarantz]

The voltage issue may be more involved. Not sure how the kit dac "knows" when it has SPDIF or USB. I haven't tried pugging in BOTH spdif and USB at the same time and seeing which one the dac selects as the default.

 

[philipsmarantz]

This is what Denafrips notes about one of its DACs:

USB2.0 Cable
DENAFRIPS DAC USB receiver is powered by its internal regulated, low noise, low ripple, high speed linear power supply.

However, it needs the USB cable to supply the +5vdc as a logic signal to trigger the internal power supply to the USB receiver. This design is intentional for best sound quality consideration.
Please use a good quality USB2.0 Type A/B cable less than or equal to <= 6ft/2m length for best results.

 

[Logon]

"it needs the USB cable to supply the +5vdc as a logic signal to trigger the internal power supply"

Thank you for answering to a my question on which some time ago I strove a lot. 👍