Reasons for Bank Card Freezes and Investigations Caused by Selling Crypto Assets and Coping Strategies

Recently, some Crypto Assets holders have encountered situations where their bank cards were frozen or they received calls from the police for “assistance in investigation” after selling digital assets (especially USDT). This article will explore the reasons, potential risks, and coping strategies for this phenomenon in detail.

The Legal Status of Crypto Assets Holdings

First of all, it is important to clarify that in our country, simply holding Crypto Assets is not illegal. Currently, there are no laws or administrative regulations directly related to Crypto Assets in place domestically. Although there are normative documents such as the “9.4 Announcement”, these documents do not constitute a “preliminary law” in the sense of criminal law, nor do they explicitly prohibit citizens from holding Crypto Assets. Therefore, merely holding Crypto Assets does not constitute an illegal or criminal act.

The Main Reasons for Issues Caused by Selling Crypto Assets

1. Irregular trading channels lead to involvement with illegal funds.

Some users sell Crypto Assets through unofficial channels and may inadvertently receive illegal funds related to telecom fraud or online gambling. These funds may come from misaligned trading platforms or be the result of certain platforms colluding with upstream criminal money laundering channels. Once banks suspect that an account has received suspicious funds, they usually take freezing measures.

2. The temptation of high returns leads to participation in illegal foreign exchange trading.

Some users choose to collaborate with so-called “mysterious experts” in pursuit of higher exchange rates. These individuals often operate underground money houses and primarily engage in illegal foreign exchange operations. Although the exchange rates they offer may be more attractive, the legitimacy of the source of funds is difficult to guarantee, which can easily lead to legal risks.

3. User’s improper behavior

In actual cases, some users have difficult-to-explain income or have participated in marginal activities. For example, some users have sold Crypto Assets while also engaging in online gambling activities, leading to a lack of clarity in the source of funds. Additionally, the absence of a stable legal income source complicates the process of unfreezing.

Will “Assisting Investigation” Lead to Criminal Risks?

In general, if one is only engaged in Crypto Assets trading, it will not directly lead to criminal risks. However, if the user has a special relationship with the sources of funds, or has a certain awareness of the improper nature of the sources of funds, they may face two main criminal risks:

1. Concealing and hiding the crime proceeds
2. Assisting Information Network Criminal Activities

Both of these charges require the actor to subjectively “know” the illegal nature of the source of the funds or the behavior. Therefore, users need to be particularly cautious to avoid getting involved in trading activities that may involve crime.

Coping Strategies When Your Bank Card is Frozen or You Are Asked to “Assist with an Investigation”

1. Self-assess criminal risks. If no other illegal activities are confirmed, prepare supporting materials to cooperate with the investigation.

2. Contact the relevant banks to obtain information and contact details of the judicial authorities regarding the frozen account, and print the related fund transaction records as much as possible.

3. Contact the trading platform and request to provide the transaction records.

4. Write a detailed situational report, including information on Crypto Assets trading status and sources of funds.

5. If asked to appear for a statement, it is recommended to consult a professional lawyer first and to be well-prepared before cooperating with the investigation. It is important to remain vigilant regarding investigation requests from law enforcement agencies in other locations.

Conclusion

In the face of a bank card freeze, there is no need to panic excessively, as a freeze does not necessarily mean involvement in a criminal case. However, whether identified as a criminal suspect or the funds in the account are considered criminal evidence, if it indeed involves proceeds of crime, even if the user is acting in good faith, there is still a possibility that the funds may be fully or partially confiscated.

Hope that Crypto Assets holders can promptly resolve freezing issues to ensure the safety of funds. When engaging in Crypto Assets transactions, it is essential to choose legal and compliant channels to avoid unnecessary legal risks.