Is going out U a high-risk behavior? What to do if you receive a "collaboration investigation" call?
If your bank card is frozen, don't panic; being frozen doesn't necessarily mean it's related to a criminal case.Author: Xiao Za lawyer
Recently, the Sa Jie team discovered that some old friends in the cryptocurrency circle had their bank cards frozen due to selling cryptocurrencies (especially selling USDT), and even received phone calls from the police requesting cooperation in "assisting with investigations."
Today, the Sa Jie team will explain in detail the reasons, risks, and countermeasures for being frozen and receiving "assistance investigation" calls due to selling cryptocurrencies.
Why am I being "hammered" just for selling USDT?
Before discussing the reasons, we need to clarify a major premise: Is it illegal to hold cryptocurrencies in our country?
Here’s the answer: It is not illegal.
This is because there are currently no laws, State Council administrative regulations, or administrative orders related to cryptocurrencies in our country.
The infamous 9.4 announcement and 9.24 notice, on one hand, are lower-level normative documents, merely departmental normative legal documents, and do not constitute "precedent law" in the criminal law sense; on the other hand, these normative documents have never explicitly stated that citizens of our country are prohibited from holding cryptocurrencies. (The 9.4 announcement prohibited illegal token issuance and financing but did not prohibit individuals from trading cryptocurrencies. Simply selling USDT purchased with RMB is not necessarily illegal.)
This means that merely holding cryptocurrencies is not illegal, and therefore cannot constitute a crime.
So, why are people being frozen and receiving "assistance investigation" calls for selling cryptocurrencies?
The "wild" channels for selling USDT lead to receiving "dirty money"
"Dirty money" mainly refers to funds involved in fraud or online gambling. Some of it comes from misallocated funds on selling platforms (which are often quite "wild"), while some selling platforms are colluding with upstream criminal money laundering channels. The step of converting cryptocurrencies to fiat currency may be a part of laundering dirty money.
In our country, money laundering is a red line behavior. Once a bank suspects that the money you received may be dirty money, it will first freeze your bank card. Those involved in selling USDT often operate overseas, and the sources of funds are complex and difficult to investigate. For retail investors, it is hard to determine whether the money received is dirty money from a single transaction, while banks generally predict through transaction frequency, cash flow, and whether the account's purpose aligns with these factors.
Seeking high "exchange rates" and cooperating with "mysterious experts"
"Mysterious experts" often engage in underground banking, primarily focusing on foreign exchange trading. Their operating method is generally "matched trading," where they collect fiat currency in one country and then deposit an equivalent amount of foreign exchange into a designated account in another country. For example, an employer's overseas employee receives a salary and does not want to go through the exchange channel (which has high fees, low rates, and slow speeds) but wants to send money to family back home, so they turn to underground banks, transferring money to the bank while the bank simultaneously transfers funds domestically, offering a better exchange rate than the official rate and avoiding tax costs.
However, it is difficult to say whether the upstream money sent to the domestic side is clean. For instance, underground banks may cooperate with other borderline businesses or fraud platforms to ensure their legal currency is sufficient. When these unclean funds are sent to domestic clients, it can easily trigger various legal risks.
Some underground banks also provide USDT exchange services, and the prices for purchasing cryptocurrencies are higher than market prices with lower fees. In this case, seeking high exchange rates can lead to involvement with upstream dirty money.
Improper behavior of the seller themselves
If one relies solely on trading cryptocurrencies for profit, the issue may not be significant. However, the Sa Jie team has found in practice that many individuals may also engage in borderline behaviors or have income that is difficult to explain.
For example, the Sa Jie team recently discovered during a service process that a certain user received some funds related to online gambling due to platform issues while selling USDT, resulting in over 400,000 yuan in their bank card being frozen. The case itself is not complicated, but through multiple communications with the client, we found that the client had a habit of participating in online gambling games and had a significant mixing of funds, leading to a serious issue: the legality of the source of funds is difficult to explain clearly. Additionally, the user's lack of a stable legal income source directly complicates the process of unfreezing.
Will "assisting with investigations" lead to criminal risks?
If it is merely trading cryptocurrencies, generally speaking, it will not. Article 64 of our Criminal Law states that all property obtained by criminals through illegal means shall be confiscated or ordered to be returned. If the funds in the account are dirty money, the public security organs have the right to confiscate them. In this case, the cardholder is not the target suspect of the public security organs but merely an innocent person affected by the involved funds, which can also be considered a "victim" in another sense.
However, the Sa Jie team has also discovered a special situation during case handling—the user has a special relationship with the source of funds that goes beyond that of an ordinary user and platform, and has a certain degree of awareness of the "improper" source of funds from the platform. This situation is more complex and presents two significant criminal risks: concealing and disguising criminal proceeds and assisting in information network crime activities.
Article 312 of our Criminal Law defines the crime of concealing and disguising criminal proceeds and their profits as: knowingly harboring, transferring, purchasing, selling on behalf of, or otherwise concealing or disguising criminal proceeds and their profits. Note that this crime requires the suspect to "know" that it is criminal proceeds, which needs to be judged in conjunction with objective behavior. For example, in cases handled by Sa Jie, the suspect not only has a specific relationship with the channel but also has a large amount of chat records that can prove their clear awareness that the source of funds from the channel may be criminal proceeds. Coupled with their behavior of holding onto the funds after receiving dirty money, it can easily be recognized by judicial personnel in our country as constituting "knowing" in the crime of concealing and disguising criminal proceeds.
Article 287-2 of our Criminal Law regarding assisting in information network crime activities is subjectively similar to the crime of concealing and disguising criminal proceeds, also requiring the suspect to "know" that others are committing crimes using information networks. This crime is more likely to occur in cases of assisting others in buying and selling cryptocurrencies, and must be approached with caution.
What to do if your card is frozen and you are asked to "assist with investigations"?
If contacted by the police, refusing to cooperate with the investigation may lead to further coercive measures by the public security organs. According to the "Regulations on the Procedures for Handling Criminal Cases by Public Security Organs," the period for freezing bank cards in criminal investigations is 6 months.
First, self-assess the criminal risk. If the selling platform misallocated dirty money and you have no other illegal behavior upon self-examination, you can cooperate with the investigation and prepare materials to prove your legality.
Contact the bank to confirm which judicial authority is exercising the power to freeze the account and obtain their contact information, and try to print relevant bank transaction records.
Contact the selling platform to request transaction records.
Write a statement explaining your cryptocurrency trading situation, the source of funds, etc., in detail and in an organized manner (if you have difficulty explaining it yourself, please consult a professional lawyer).
If contacted by local public security to explain in person, consult a professional lawyer in advance, prepare well, and cooperate with the investigation. If it is a freezing by a public security organ from another location requiring you to go there to cooperate, be cautious.
In conclusion
If you encounter a frozen bank card, do not panic; being frozen does not necessarily mean involvement in a crime. However, it is essential to be mentally prepared that whether the cardholder is recognized as a suspect in a criminal case or the funds in the account are evidence of a criminal case, if it indeed belongs to dirty money, even if the cardholder is "innocent," there is still a possibility of the funds being confiscated or partially confiscated.
Finally, I hope all friends in the cryptocurrency circle can unfreeze their accounts in a timely manner and stay safe. We are always here for you!
