The true state of sudden wealth in the cryptocurrency world: Is there a lie behind the myth?
In the cryptocurrency boom, legends of sudden wealth abound. Some claim to have achieved financial freedom through cryptocurrency trading, flaunting account balances often reaching hundreds of thousands or even millions. However, careful observers will notice that they never reveal bank account balances or property deeds, only the 'virtual assets' in cryptocurrency accounts.
A retired cryptocurrency trader bluntly stated: 'Those retail investors who claim to have made wealth and achieved financial freedom through the cryptocurrency world are either bragging or in prison.' He has long been accustomed to the illusion of the 'wealth myth' in cryptocurrency and has witnessed the truth: most retail investors who became wealthy cannot smoothly cash out.
This old cryptocurrency trader once said that as long as someone dares to flaunt large sums of money entering their bank account in the cryptocurrency world, they most likely have some real skills. Because anyone trying to 'clean' their cryptocurrency trading income is almost without exception beaten to a pulp by 'the iron fist of society.'
The 'digital wealth' that cannot take root: The dilemma of suddenly wealthy retail investors
On a cryptocurrency forum, Xiao Zhang posted a striking message: 'I made 9 million by trading cryptocurrency; how can I successfully cash out? Is there anyone who has experience to guide me?' As soon as the post was published, the comment section immediately erupted.
'You dare to say you made 9 million? You're just bragging!' someone scoffed in response. Others pointed out directly: 'Can the bank let you easily cash out? Even if you really made it, can such a large sum smoothly reach your bank account?'
Xiao Zhang helplessly explained that his attempt to withdraw hundreds of thousands for the first time resulted in his account being frozen. The bank not only demanded proof but also repeatedly reviewed the funds, leaving Xiao Zhang no choice but to stop temporarily. His initial excitement about sudden wealth was quickly doused by the 'cold water' of reality, and he gradually realized that the so-called 9 million was just a number in his account.
The 'iron net' of anti-money laundering regulation: Large withdrawals are tantamount to walking a tightrope
Behind the apparent glory of sudden wealth in the cryptocurrency world lies a huge 'anti-money laundering' problem. Under the bank's anti-money laundering regulatory system, any large capital inflow or outflow may trigger automatic monitoring, especially for funds with unclear origins. Once a large withdrawal operation occurs, the bank will immediately lock the account and initiate an investigation.
Xiao Zhang's withdrawal being frozen is the most direct example. The bank's risk control system automatically identified the abnormal inflow in his account and required him to explain the source of the funds at a bank branch. The teller even reminded him that if he could not prove the legality of the money, the bank had the right to freeze and report it. In Xiao Zhang's account of events, his cryptocurrency trading account seemed to be labeled, and every large operation became a focus of the bank's attention.
Players in the cryptocurrency world gradually understand one thing: without formal channels and strong networks, it is simply impossible to withdraw millions or even tens of millions. Those who claim to be financially free among the wealthy retail investors are almost none who dare to withdraw funds smoothly within the banking system. Old Li, a cryptocurrency trader, is not surprised: 'The anti-money laundering system and manual reviews turn your account into a 'transparent wallet.' Without a legitimate source, all wealth is just talk.'
The indistinguishable sources of funds: Do you really think the cryptocurrency world is 'clean money'?
In the cryptocurrency world, wanting to cleanly take in funds is almost impossible. Most people are unaware of how deep the waters of the cryptocurrency world are and how complex the flow of funds is. As Old Li often mentions, 'Most of the money in the cryptocurrency world carries a color; no one knows where the funds actually come from, whether from the first hand or the second hand.'
Old Li gave an example of a newcomer in the cryptocurrency world, A Kai, who made some money by luck. He tried to withdraw small amounts a few times without problems and decided to withdraw one million yuan at once. However, just a few days after the funds arrived, A Kai's account was frozen, and the bank required him to explain the specific source of the money. A Kai thought it was the profits from trading, but the bank's system found that the funds indirectly came from illegal accounts, tracing back to a telecommunication fraud money chain.
'The funds in the cryptocurrency world are mixed up; who knows how much gray trading is involved?' Old Li said. For cryptocurrency traders, such gray funds are almost commonplace. Because of this, retail investors encounter obstacles when they want to withdraw funds. Once large amounts trigger the bank's anti-money laundering system, both the bank and the police will pay attention, and funds that may involve money laundering will quickly be targeted by regulators.
'Behind the myth of sudden wealth in the cryptocurrency world is an abundance of unaccounted dirty money and gray funds. The possibility of easily cashing out is almost zero,' Old Li shook his head and sighed.
The cost of gray operations: The nightmare of retail investors in cash-out scams
In the cryptocurrency world, many suddenly wealthy retail investors realize the difficulty of cashing out and seek gray channels to bypass the bank's anti-money laundering reviews through 'cash-out services' or 'underground banks.' However, cashing out through gray channels is not only risky but also filled with various scams and traps.
Xiao Lin once made some money by trading cryptocurrency. Due to frequent bank rejections, he found a 'professional cash-out' intermediary through a friend in the cryptocurrency world. The intermediary claimed that by paying a 10% fee, he could smoothly convert cryptocurrency into cash. Full of hope, Xiao Lin paid over a hundred thousand in fees, but after the payment, the other party went completely offline, blocking all contact channels.
After the fact, Xiao Lin learned that the so-called 'cash-out' services were filled with scammers, especially targeting those eager to withdraw funds. 'That ten thousand yuan in fees became completely wasted money,' Xiao Lin regretted. The 'underground banks' in the cryptocurrency world often use information asymmetry to deceive retail investors; once the money is received, they immediately vanish.
The cash-out scam is not limited to Xiao Lin; many novice retail investors are targeted by 'ATM' criminals during the cash-out process. They initially sought to avoid the bank's anti-money laundering risk control but ended up falling into a deeper trap.
'Sewing machine university' and the trap of black funds: The fate of poor people who suddenly become wealthy
In the cryptocurrency world, the outcome of sudden wealth is not always 'financial freedom'; it is more likely to lead to 'sewing machine university'—a slang term in the cryptocurrency world referring to going to prison due to illegal fund operations or gray withdrawals. Retail investors who attempt to withdraw large sums after becoming suddenly wealthy often fall victim to the anti-money laundering mechanisms, and some even become targets of judicial action due to issues with 'black funds' in their capital chains.
Old Li mentioned a cryptocurrency big shot, Luo Ge, who started with small stocks and, years later, amassed virtual assets worth several tens of millions. Luo Ge initially wanted to purchase a large amount of gold bars through gray channels to avoid bank monitoring but ended up being targeted by the police. Due to the complex source of his funds and inability to prove their legitimacy, Luo Ge was ultimately charged with illegal fundraising and sentenced to three years in prison.
'The outcome for poor people who suddenly become wealthy is a disaster; the more they try to cash out, the more likely they are to fall into the abyss,' Old Li lamented. In his view, those retail investors who have truly left the scene have long since done so quietly, while those who continue to flaunt their sudden wealth and attempt to 'evade taxes' or 'make gray withdrawals' are only digging their own graves.
From sudden wealth to bankruptcy: The psychological struggle of cryptocurrency players
In the cryptocurrency world, sudden wealth did not give retail investors true freedom; instead, it burdened them with heavy psychological stress. Xiao Zhao is a novice in the cryptocurrency world who made a fortune by luck, only to find that family relationships became increasingly strained, and the pressure from relatives and friends left him physically and mentally exhausted. Family members began to borrow money from him, and friends frequently proposed 'joint investments.' Xiao Zhao gradually realized that he could not maintain a balanced mindset amid the enormous expectations of wealth.
In the end, Xiao Zhao couldn't resist diving back into the cryptocurrency world, doubling his investment in an attempt to meet the expectations of relatives and friends with a surge in value. However, market fluctuations caused him to lose almost all his earlier earnings. Xiao Zhao recalls: 'Sudden wealth does not bring happiness; instead, it makes people more anxious.' Wealth did not improve his life; instead, it brought various troubles. There are too many people like Xiao Zhao in the cryptocurrency world; they think they have achieved 'financial freedom,' but gradually they are consumed by unease amid the joy of sudden wealth, ultimately returning to the circle and falling into endless losses and anxiety.
Tax risks and cross-border restrictions: The transformation from financial freedom to burden
In the cryptocurrency world, many people fantasize about evading domestic regulations through overseas bank accounts. However, the monitoring of cross-border funds is stricter than they imagine, especially under the global financial information exchange system; any large cross-border fund movements will be included in the oversight of tax authorities in various countries.
Xiao Zhao is one of the victims. He exchanged cryptocurrency assets for US dollars and transferred them to an account in Hong Kong, intending to gradually bring the money back to the country in foreign exchange. A few days after the money arrived, the Hong Kong bank informed him that his account had been frozen and stated that his transactions needed to be reported to the local tax authority. Xiao Zhao realized that cross-border capital flows were not as free as he had imagined, and the money ultimately did not return smoothly to the country, instead exposing him to the risk of back taxes.
Similar incidents are not uncommon. Many retail investors are informed after attempting cross-border remittances that these capital movements will be reported to domestic tax authorities. Under the Common Reporting Standard (CRS), transaction information from overseas banks is transferred to Chinese tax authorities, and all assets in overseas accounts, especially large capital movements, are monitored. Some retail investors who attempt to evade regulation not only fail to cash out but also face the dilemma of domestic tax retroactive claims.
The price of sudden wealth: The dual troubles of family and interpersonal relationships
Suddenly wealthy retail investors often overlook changes in their interpersonal relationships and family life. Wealth did not bring them the 'freedom' they expected; instead, it added new burdens. Xiao Wu was originally an ordinary office worker who made over two million through cryptocurrency trading. His family improved as a result, and relatives and friends cast envious glances. However, new problems arose one after another.
After learning about Xiao Wu's income, relatives and friends began to frequently borrow money from him, and some even invited him to invest together. Faced with the continuous 'requests,' Xiao Wu felt uneasy. He had tried to decline, but the sarcastic remarks from family made him feel trapped. To relieve the pressure, Xiao Wu invested again in the cryptocurrency world, hoping to earn more money to meet family needs. However, this time he was not so lucky; the cryptocurrency prices plummeted, and only a small portion of his initial capital remained in his account, resulting in total losses.
After experiencing the ups and downs of sudden wealth, Xiao Wu realized that wealth did not make life easier but instead brought new burdens and invisible pressure. The sudden wealth in the cryptocurrency world seems dazzling, but in reality, it leads countless people into confusion due to the psychological stress and emotional exhaustion following their sudden wealth.
The risks brought about by gray withdrawals: The invisible crisis of black market operations
Many retail investors, after encountering bank risk control, turn to gray channels, seeking cash-out services or third-party operations, hoping to achieve 'safe withdrawal' by circumventing bank reviews. However, the cost of these gray operations is often enormous. Without reliable guarantees, cash-out services are filled with scammers and criminals, and a slight misstep can lead to falling into the black market trap.
In the cryptocurrency world, the term 'cash-out' often refers to converting cryptocurrency into cash through informal channels, bypassing the banking system. However, the lack of formal institutions makes the entire process a breeding ground for scammers. Xiao Li fell into a scam while looking for a cash-out intermediary. The other party initially promised to charge a 10% fee, with funds arriving within a few days, but after Xiao Li paid the fee, the other party vanished, leaving him in regret.
What Xiao Li did not expect was that his attempt to withdraw funds through underground channels quickly spread within the circle, leading numerous scammers to contact him, claiming they could help him 'smoothly' execute the operation. After much hassle, Xiao Li not only lost a significant amount of money but also fell into continuous harassment from criminals. Gray withdrawals not only failed to achieve 'safe cashing out' but also made him lose the last bit of confidence in his cryptocurrency assets.
The loss of control in 'overnight wealth': Self-destruction in the traps of the cryptocurrency world
Behind the myth of sudden wealth in the cryptocurrency world lies a dual test of wealth and human nature. Those once cautious retail investors find it difficult to continue investing rationally after becoming wealthy, often eager to expand their investments, fantasizing about larger returns. Xiao Zhou is a typical example: he earned several million in a favorable market situation, but this money did not satisfy him; instead, it led him to indulge in the pursuit of even higher investment returns.
Xiao Zhou began to double his investment, using up all his savings and taking out loans to buy cryptocurrency, only to encounter a sharp drop in prices. Within just a few months, his assets dropped from over a million to debt. His family could not accept this, friends distanced themselves, and it even triggered family conflicts. Xiao Zhou fell into self-blame, feeling that he had ruined his life due to a momentary dream of sudden wealth.
The stories of sudden wealth in the cryptocurrency world can sometimes be exciting, but for many, the wealth brought not 'freedom' but uncontrolled desires and psychological imbalance. Under the temptation of wealth, retail investors find it difficult to remain calm and rational, ultimately becoming victims in the volatile market.
The truth of wealth in the cryptocurrency world: The 'myth' of cashing out
Old trader Old Li always reminds those deluding themselves into thinking they can become wealthy: 'You can see the millions or tens of millions on paper, but until you actually receive any of it, no one should claim to be financially free.' He recalls a few 'retail investor millionaires' he encountered; those who ultimately secured their gains were nearly nonexistent. The virtual assets in the cryptocurrency world seem glorious but become unattainable under the layers of bank and anti-money laundering regulations.
Those retail investors who reportedly earned tens of millions and achieved financial freedom often end up in tragic situations—some have their cards locked due to large withdrawals, others are scammed while searching for underground cash-out channels, and some become heavily indebted due to broken capital chains. The myth of wealth in the cryptocurrency world is heavily packaged, ultimately trapping newcomers in a huge financial trap.
Xiao Li recalled: 'The truly wealthy are not those who boast about their wealth, but those who quietly made some money and left the scene modestly.' Behind the stories of wealth in the cryptocurrency world, there is no imagined brilliance. Every legend of sudden wealth may be a bubble, and behind the bubble lies multiple risks involving law, psychology, and family.
The boundaries of wealth, risk, and reality
In the legends of sudden wealth in the cryptocurrency world, the numbers representing wealth often resemble a surreal 'bubble game.' In reality, the so-called 'book wealth' encounters numerous obstacles when it leaves the virtual account, making it challenging to truly cash out. Wealth in the cryptocurrency world cannot escape anti-money laundering monitoring or tax oversight; the so-called 'overnight wealth' may instead lead to a nightmare when cashing out.
For many retail investors, wealth has not brought more freedom but rather increased pressure. Many believe that the high returns from trading cryptocurrency can lead them to financial freedom, but in practice, they often encounter obstacles in cashing out, anti-money laundering, and tax pressures, even falling into scams or losing everything. The increase in wealth does not equate to the disappearance of risks but instead amplifies the desires and luck within human nature.
The wealth stories in the cryptocurrency world may be tempting, but very few actually achieve 'freedom.' Most retail investors who become wealthy cannot detach themselves from the illusion of wealth and ultimately turn against the law and society under dual pressure. This is not only a misunderstanding of wealth but also a failure to recognize real risks.