Trading virtual currencies has three major legal red lines. The light consequence is a frozen bank card, while the severe consequence may involve criminal charges.
What are the legal red lines for trading virtual currencies within mainland China? Once these lines are crossed, one may face a frozen bank card at best, or criminal charges at worst. Let's hear what professional lawyers have to say:
First, selling USDT to inexperienced investors. If an inexperienced investor transfers USDT to a third-party platform for investment or contracts, and despite the transaction being completed, if the investor encounters a scam, some law enforcement units may freeze your receiving bank account and even classify you as a criminal suspect.
Second, cash transactions. Starting in the second half of 2024, many individuals engaging in offline cash transactions of USDT have faced scrutiny, because as long as the source of the funds received is linked to fraud, law enforcement will suspect that you are involved in money laundering and may detain you.
Third, buying and selling USDT on certain exchanges without verifying the counterpart's information, if the payment is made by a non-verified account and the funds are associated with fraud, your bank card will be judicially frozen, and you'll face claims for refund and unfreezing. If you are a USDT trader and your card gets frozen, law enforcement may initially determine you are involved in money laundering based on your transaction patterns and might even label you as a fugitive online.
