Previously, I provided a buying guide for cryptocurrency friends, which has been read by over 100K people. In the buying guide, I mentioned the current chaotic situation of C2C, especially pointing out that most C2C merchants on the Binance platform do not operate according to the corresponding C2C rules, leading to attacks by a small number of merchants, which was expected. From the previously published articles, it also reflected the obstacles to purchasing and the difficulties in cashing out faced by cryptocurrency friends. Today, I will deeply analyze the issues of cashing out U and cash out in mainland China.

I. Legal Issues Faced

The People's Bank of China has explicitly prohibited token issuance financing (such as ICOs) and the operation of virtual currency exchanges since 2017 with the announcement on preventing the risks of token issuance financing. In 2021, the notice on further preventing and addressing the risks of virtual currency trading speculation further strengthened this regulation. It clearly states that overseas virtual currency exchanges providing services to residents in mainland China through the Internet are also considered illegal financial activities, and financial institutions and non-bank payment institutions may not provide services for virtual currency-related business activities. The notice emphasizes a strict crackdown on illegal operations, financial fraud, and other criminal activities related to virtual currency business activities.

The aforementioned legal issues mainly address illegal operations (C2C merchants) and criminal activities. Are there any legal issues with personal cash out? Those who often pay attention to foreign exchange know that according to Article 17 of the Foreign Exchange Administration Regulations of the People's Republic of China, domestic institutions and individuals engaging in direct investment abroad or trading foreign securities and derivative products must register according to the provisions of the foreign exchange management department of the State Council. If the state regulations require approval or filing with relevant competent authorities in advance, such approval or filing procedures must be completed before foreign exchange registration. According to Article 45 of the Foreign Exchange Administration Regulations of the People's Republic of China, engaging in unauthorized buying and selling of foreign exchange or illegally introducing significant amounts of foreign exchange transactions, will be warned by the foreign exchange management authority, confiscate illegal gains, impose a fine of less than 30% of the illegal amount, and in severe cases, impose a fine equal to or less than 30% of the illegal amount. If it constitutes a crime, criminal responsibility will be pursued according to law. Reviewing relevant legal provisions mainly targets capital flowing out of the country, while the inflow appears to be relatively lenient.

II. Facing the Issues of 'Conversation' and 'Card Freezing'

What reasons could lead to being talked to and having cards frozen by the 'hat uncle'? Currently, there are two situations in mainland China that can cause bank cards to be unusable: one is called 'stopping payment' (bank card can only receive but not withdraw), and the other is called freezing (a portion of the card's funds is frozen or the entire card is frozen). Cryptocurrency friends often say their bank cards have been frozen, but this statement is not comprehensive, as there is also the issue of 'stopping payment'.

Friends who are often victims of telecom fraud should know that after reporting to the police in mainland China, the police will ask for the bank card information of the party to whom the funds were transferred. The police will take corresponding actions to stop the payment (the stopping time is generally 3 days or 7 days). According to Article 144 of the Criminal Procedure Law of the People's Republic of China, the People's Procuratorate and public security organs can query and freeze the deposits, remittances, bonds, stocks, fund shares, and other properties of the suspects according to the needs of criminal investigation. Article 145 states that for seized or detained property, documents, mails, telegrams, or frozen deposits, remittances, bonds, stocks, fund shares, etc., if it is confirmed that they are indeed unrelated to the case, they should be released within three days and returned. There is a problem here, as mentioned in the earlier article on purchasing; if your bank card receives funds from the reporter (the victim), it will undoubtedly be frozen and you will be asked to have a conversation. There is also another risk; if you are a third or fourth level recipient, you will also be subject to payment stoppage and asked to have a conversation (for example: the reporter transfers funds to the criminal, the criminal transfers through other means to a C2C merchant, and the merchant then transfers the funds to the U party).

III. How to Cash Out

Bip bip, how to cash out? Regarding personal cash out, according to the legal documents of mainland China currently reviewed, personal cash out at most violates Article 17 of the Foreign Exchange Administration Regulations of the People's Republic of China. However, there are many people trading cryptocurrencies in mainland China, and the policies regarding transferring funds into mainland China are relatively relaxed. The main issue for cash out personnel is to avoid the second problem, the legality of the funds purchased by merchants. Currently, financial institutions in mainland China manage personal payments more rigorously, and the number of individuals who can transfer amounts exceeding 50,000 online daily is very small. If large cash outs are suggested, individuals should control the amount to be below 50,000 daily. To avoid being asked to have a conversation and penalties by the 'hat uncle', in the case of cash out, if the payer's information does not match the merchant's, the transaction should be refused, and a relevant statement should be signed with the other party. After the other party signs the statement, both parties should take photos holding the statement with their ID cards for each other to keep. Even if asked to have a conversation by the 'hat uncle', having relevant records and statement will provide effective defense, ensuring the safety of personal finances. (Regarding large cash out, of course, the premise is that the U you cash out is income from investment or cryptocurrency trading.)

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