Pay attention to several points that can effectively prevent receiving dirty money and being card frozen.
(1) Try to choose large platforms for OTC transactions, such as Binance and OKEx. These platforms have good communication channels and risk control measures with regulatory and law enforcement agencies in mainland China.
(2) Try to choose OTC platforms that support T+1/T+2 withdrawal strategies. Although you cannot withdraw immediately after selling coins, it reduces the risk of being suspected of money laundering through OTC transactions. For example, Binance T+1, Huobi Strictly Selected Trading (compared to free trading, T+2 withdrawal).
(3) Avoid using stablecoins like USDT for OTC transactions; try to use mainstream coins like BTC and ETH for OTC transactions.
(4) The bank card used for OTC transactions should be a separate card that is usually not used, kept separate from salary cards, so that even if it is frozen, it will not affect the use of other funds. During the investigation, it will also be easier to clarify the flow of funds.
(5) For OTC transactions, try to use cards from local banks, such as local city commercial banks or rural commercial banks. Large and medium-sized joint-stock and commercial banks like Industrial and Agricultural Bank, China Construction Bank, and China Merchants Bank have branches across the country, making it easier for law enforcement to freeze accounts directly.
(6) Do not frequently transact with fixed merchants and avoid frequent transactions with fixed users. Indirectly purchasing more than 3 times from the same user in a day, or buying and then selling a few hours later, can be very dangerous and highly suspicious of money laundering.
(7) Find reliable OTC merchants for transactions. Try to actively take big orders from major merchants and market makers, and place fewer orders; avoid merchants in problematic areas. In fact, as a regular user, it is difficult to distinguish which merchants are reliable. For example, many friends who traded with Huobi's Blue Shield service provider also had their cards frozen.
(8) Reduce the frequency of withdrawals and increase the amount of cash conversion.
(9) After an OTC transaction, do not transfer to your other bank cards to avoid contaminating other funds, making it troublesome to explain during the investigation. If you urgently need money, you can withdraw cash through an ATM or spend it online.
(10) Try to choose weekdays for cash conversion. It is best to conduct transactions during normal working hours, such as between 9 AM and 9 PM.
(11) Do not transfer out immediately after receiving payment. After selling USDT for RMB, do not transfer out immediately; leave it in the account for a while.
If we suffer from a card freeze, how should we explain to prove that we are not involved in money laundering activities?
(1) The individual is engaged in normal Bitcoin trading and does not involve money laundering or other transactions;
(2) The individual is not aware of any criminal suspicion related to the debts received from selling coins;
(3) Provide all transaction records, chat records, on-chain transfer records, etc.;
(4) You must be very clear that engaging in digital asset trading does not violate the law.
For OTC transactions, if the withdrawal bank card is frozen due to police judicial freezing, what materials will the other party require to lift the freeze?
Commonly required materials mainly include: complete transaction records, such as bank card statements, on-chain transaction records, trading platform order records, WeChat chat records (including content related to the transaction process), and other evidence that can prove the legality of assets, even income proof, etc.
So, once you unfortunately receive dirty money and your card is frozen, how should you resolve it?
First, go to the bank to understand the reason for the card freeze and which authority has the right to freeze the card.
The reasons for card freezing can be summarized into two types: bank risk control and police freezing.
1. Bank risk control. The reasons for bank risk control may include frequent large transfers recently, dispersing transfers in and concentrating transfers out, concentrating transfers in and dispersing transfers out, fast in and out, frequent transactions at night, and not leaving a balance in the account, collectively referred to as transaction abnormalities. This triggers the bank's anti-money laundering risk control system.
2. Police freezing. Usually occurs when the account has received other illicit funds related to a case, which may be received directly or indirectly. The police will freeze all accounts associated with the involved transactions to prevent fund transfer and facilitate case investigation.
How to resolve the two reasons for card freezing?
1. Regarding bank risk control freeze.
Bring your ID card and bank card to the bank to communicate, and submit relevant transaction statements; if there are policies or directives from the police involved, you must also cooperate with the local police department's investigation. If triggered by the anti-fraud center model control, you need to fill out the anti-fraud application form as required by the anti-fraud department, and only after passing the review can your account be unfrozen.
2. Responding to police judicial freezing.
First, observe for 3 days. See if the temporary freeze has turned into a formal freeze (continuing for six months). If it turns into a formal freeze, go to the bank immediately to check the name of the police unit that froze the card, the case number, and the name of the police officer responsible for the case. Then contact the responsible police officer to understand the reason for the card freeze and cooperate with the police's investigation. After confirming that you have not committed any illegal or disciplinary violations, your account will be unfrozen.