Recently, it was discovered that some old friends in the cryptocurrency circle had their bank cards frozen due to selling cryptocurrencies (especially USDT), and even received calls from the police asking them to "assist in the investigation."
Today we will explain in detail the reasons, risks and response strategies for bank cards being frozen and receiving "assistance investigation" calls due to selling cryptocurrencies.
I just made a U, why did I get "hammered"?
Before discussing the reasons, we need to clarify an important premise: Is it illegal to hold cryptocurrency in our country?
The answer is: it is not illegal.
At present, my country has not issued any laws, State Council administrative regulations or administrative orders related to cryptocurrencies. Although there are documents named 9.4 Announcement, 9.24 Notice, etc., these documents are departmental normative legal documents and do not constitute "pre-laws" in the sense of criminal law. These documents are mainly aimed at illegal token issuance and financing, and do not explicitly prohibit individuals from holding or trading cryptocurrencies (for example, the 9.4 Announcement prohibits illegal token issuance and financing, not individual trading in cryptocurrencies). Therefore, it is not necessarily illegal for an individual to simply sell USDT purchased with RMB.
In summary, simply holding cryptocurrencies is not illegal and naturally does not constitute a crime. So why does selling cryptocurrencies lead to bank cards being frozen and receiving calls to "assist in the investigation"?
The U channel is "wild", resulting in receiving "black money"
“Black money” mainly refers to the stolen money involved in illegal activities such as telecommunications fraud and online gambling. In some cases, these funds may be mistakenly transferred from cryptocurrency platforms (which are sometimes poorly managed) or directly colluded with upstream criminal money laundering channels. The exchange of cryptocurrency for legal currency is sometimes used as a means of laundering black money.
In my country, money laundering is strictly prohibited. Once a bank suspects that your account funds may be related to money laundering, it will usually freeze your bank card first. Since the operations of the U-exchange platform are often overseas, and the source of funds is complex and difficult to track, it is difficult for ordinary users to determine whether the funds they receive are black money. Banks usually identify and prevent potential money laundering activities by analyzing factors such as transaction frequency, fund flow, and account usage, combined with internal supervision.
Cooperating with a "mysterious expert" for the sake of a high "exchange rate"
"Mysterious masters" are usually involved in underground money exchange business, mainly foreign exchange exchange. This type of operation usually adopts the "counter-knocking" method, that is, collecting legal currency in one country and then depositing the equivalent amount of foreign currency into an account in another country. For example, an employer abroad may want to remit wages to his family in China, but due to the high handling fees, low exchange rates and slow speed of the foreign exchange settlement channel, they will choose the underground money exchange service. The underground money exchange will receive the funds and remit the same amount of funds to the country, while providing a better exchange rate than the legal exchange rate and avoiding tax costs.
However, the source of funds for underground banks is not always clean. Banks may cooperate with marginal operations or fraud platforms to ensure sufficient legal currency. These dirty funds are prone to legal risks when they are transferred to domestic customers.
In addition, some underground banks also provide cryptocurrency exchange services, usually offering higher prices than the market price, but with lower handling fees. Users who covet high exchange rates may be involved in the upstream illicit money, bringing potential legal problems.
The issuer himself behaved inappropriately
If you simply rely on cryptocurrency speculation to make a profit, the problem is usually not big. However, in practice, the Xixi community has found that many parties often have some borderline behaviors or income that is difficult to explain clearly. For example, Xixi recently discovered in the process of providing services to customers that a user received a part of the online gambling funds due to platform reasons when conducting USDT transactions, resulting in the freezing of more than 400,000 yuan in his bank card. The case itself is not complicated, but after communicating with the customer many times, it was found that the customer not only participated in online gambling games, but also had a large amount of funds mixed. This makes it difficult to explain the legitimacy of the source of funds. In addition, the user himself does not have a stable and legal source of income, which makes the unfreezing process difficult.
Will “assisting in the investigation” lead to criminal risks?
If you are just speculating in cryptocurrencies or conducting legal cryptocurrency transactions, it usually does not cause any problems. According to Article 64 of my country's Criminal Law, the illegal gains of criminals should be recovered or reimbursed. If the funds in the account are stolen money, the public security organs have the right to recover them. At this time, the cardholder is just an innocent victim, equivalent to a "victim" in another sense.
However, the Xixi community discovered a special situation - users and funding source channels have a special relationship that goes beyond ordinary users and the platform, and they have a certain degree of awareness of the platform's improper funding sources. This situation is more complex and presents two significant criminal risks:
Crime of concealing and hiding the proceeds of crime: According to Article 312 of the Criminal Law, the act of concealing and hiding the proceeds of crime and their benefits refers to knowing that these funds are proceeds of crime and hiding, transferring, purchasing, selling on behalf of others, or concealing and hiding them in other ways. This crime requires the suspect to "know" that the funds are proceeds of crime. For example, if the suspect has a specific relationship with the funding channel and there are chat records proving that he has a clear understanding of the criminal nature of the source of funds, and at the same time, after receiving the stolen money, he still deposits the funds, he may be deemed by the judicial authorities to constitute "knowingly" in the crime of concealing and hiding the proceeds of crime.
Crime of assisting criminal activities on information networks: According to Article 287-2 of the Criminal Law, assisting others in using information networks to commit crimes also falls under this crime. This crime is similar to the crime of concealing criminal proceeds, and also requires subjective "knowledge" that others are using information networks to commit crimes. This kind of situation is more likely to occur when helping others buy and sell cryptocurrencies, so be especially vigilant.
What should I do if my card is frozen and I am asked to “assist in the investigation”?
If you are contacted by the police, refusing to cooperate with the investigation may result in the public security organs taking further compulsory measures. According to the "Procedures for the Public Security Organs to Handle Criminal Cases", the period for freezing bank cards for criminal investigation is 6 months. In order to effectively deal with this situation, it is recommended to take the following steps:
Self-assessment of criminal risks: If you find that your account funds may be involved in illegal activities (such as mismatching and black money from the U platform), if there is no other illegal behavior after self-examination, you can cooperate with the investigation and prepare materials to prove your legality.
Contact the bank: confirm the judicial authority that has frozen the account and its contact information, and try to print out the bank statements of the relevant funds in and out for investigation.
Contact the U platform: ask the platform to provide trading records in order to understand and prove the source and destination of the funds.
Write a statement of facts: explain in detail and in an organized manner the circumstances of your cryptocurrency trading and the source of funds. If you have difficulty explaining it yourself, it is recommended that you consult a professional lawyer.
Contact the local police: If the local police ask you to come to the scene to explain the situation, you need to consult a professional lawyer in advance and cooperate with the investigation after being prepared. If the public security agency in another place freezes your account and asks you to go to the local area to cooperate with the investigation, you need to be particularly vigilant to avoid further legal risks.
Final Thoughts
If your bank card is frozen, don't panic. Being frozen does not necessarily mean that you are involved in a criminal case. But you need to be mentally prepared that no matter whether the bank card holder is identified as a suspect in a criminal case or whether the flow of funds in the account is used as evidence in a criminal case, if the funds in the account are indeed stolen money, even if the bank card holder is "in good faith", he or she may face the risk of having the funds recovered or partially recovered.
Finally, I hope that all my friends in the cryptocurrency circle can successfully unfreeze their accounts and be safe and sound.
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