Case 1: Abnormal transactions between OTC merchants and fixed counterparties
From April to May 2020, the defendant Yang engaged in virtual currency trading, first purchasing USDT from 'Huobi' and then reselling it at a markup on other platforms, with relatively fixed trading counterparts. Aware that virtual currency trading could assist others in moving criminal proceeds, Yang continued trading using multiple Alipay accounts he controlled even after one account had been frozen. In a short time, he received and transferred funds amounting to 7,132,292 yuan in the form of 'buying and selling coins', earning a price difference of 15,000 yuan. Ultimately, Yang was sentenced to three years and two months in prison for concealing and hiding criminal proceeds. His behavior of communicating and trading with fixed buyers offline on a third-party platform did not conform to normal coin trading and withdrawal conditions, and after his account was frozen, he continued trading using others' accounts. Various anomalies combined with chat records and testimony led to the conclusion that he was aware that he was assisting in the transfer of criminal proceeds.
Case 2: Cashing out for a coin theft gang
In early January 2023, Zhu and Deng conspired with others to use a Trojan link and 'fake wallet' app developed by technicians to steal coins. They lured victims to click on the Trojan link or download the fake wallet with the bait of exchanging JD E-cards for USDT, obtaining the wallet's mnemonic phrase and private key. Once the USDT in the victim's wallet reached a certain amount, they would transfer the coins to a designated address through the backend. Du was responsible for exchanging the stolen USDT for cash via OTC and handing it to Zhu. Ultimately, Zhu and others' coin theft behavior constituted the crime of illegally obtaining computer information system data and theft, leading to a sentence of ten years in prison; Du was sentenced to seven months in prison with a one-year probation for concealing and hiding criminal proceeds. This criminal gang exploited the high-pressure regulation of virtual currencies domestically by sending fake wallets and exchange apps through unofficial channels to defraud investors of USDT. Du was aware that he was dealing with stolen funds and still assisted in cashing out, thus being convicted.
Risks of withdrawing U in the currency circle
Legal and policy risks
The notice jointly issued by ten departments including the People's Bank of China on September 24, 2021 (on further preventing and dealing with the risks of speculation in virtual currency trading) clearly stipulates that activities related to virtual currencies are illegal financial activities. Engaging in the exchange of legal currency for virtual currency, trading between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency trading, token issuance financing, and virtual currency derivatives trading are strictly prohibited. Those who constitute a crime will be held criminally accountable according to the law. Participating in underground money house-style virtual currency trading and assisting others in exchanging virtual currency for legal currency may result in legal consequences once detected.
Risk of fund freeze
Receiving dirty money: The anonymity and convenience of virtual currency transactions make them a breeding ground for money laundering. If the counterparty's funds originate from fraud, theft, or other criminal activities, your bank card may be frozen when police track the funds. For instance, an investor frequently withdrew U through a small trading platform, leading to the freezing of their bank card due to receiving funds related to a telecommunications fraud case.
Abnormal transactions trigger risk control: Frequent large withdrawals or trading with multiple unfamiliar accounts in a short period can easily be regarded as abnormal by banks, triggering risk control systems that freeze accounts. Account freezes can lead to an inability to withdraw, transfer, or make payments normally, affecting salary deposits and investment management, and may also impact personal credit ratings.
Trading platform risks
Platform running away: Some small trading platforms may suddenly close and abscond with funds after attracting users to deposit and trade. There have been cases where a virtual currency trading platform suspended transactions under the pretext of server maintenance and then disappeared, leaving investors with nothing.
Hacker attacks: Some trading platforms are vulnerable to hacker intrusions, resulting in theft of users' virtual currency assets. Hackers use technical means to breach platform security, steal user information and assets, causing losses to users.
Internal operations are not standardized: Some trading platforms engage in price manipulation, false transactions, and other behaviors that disrupt market order and harm user interests. Platforms may use improper means to influence virtual currency price trends, causing users to trade in an unfair environment.
Safe methods for withdrawing U
Choose compliant platforms
Binance: A globally recognized cryptocurrency trading platform, actively seeking legal operation licenses in multiple countries and regions, complying with local financial regulatory laws. It uses advanced multi-signature technology to store user assets in cold wallets, with a professional security team monitoring transactions in real time to reduce the risk of asset theft and ensure transaction security.
OKX: Establish a strict user identity verification system, verifying user identities through KYC authentication. Employ bank-level SSL encryption technology to encrypt and transmit and store transaction data and personal information, providing various security settings options like Google Authenticator and SMS verification to enhance account security.
Carefully select trading counterparties
Check transaction records: Reputable currency dealers usually have a large number of coherent and stable successful transaction records. Check transaction frequency, amount range, and diversity of counterparties. If transaction records are few or there are unusually large transactions, proceed with caution.
Understand reputation: Learn about the reputation of currency dealers through communication with other investors, searching for reviews in virtual currency communities or forums, etc. Most currency dealers with good ratings have high credibility, while those with many negative reviews, such as owing funds or dishonesty in transactions, should be avoided.
Confirm the source of funds: Before trading, request currency dealers to provide proof of the source of funds to ensure legality. Currency dealers who cannot provide reasonable proof may be involved in illegal activities, and trading with them could lead to account freezes and legal risks; therefore, do not trade with them.
Optimize trading operation details
Avoid frequent large transactions: Frequent large transactions can attract the attention of regulatory authorities and banks, being classified as abnormal transactions and triggering risk control mechanisms, leading to transaction interruptions and account freezes. Plan the amount and timing of U withdrawals reasonably based on actual needs to avoid large withdrawals within a short time.
Reasonably plan the amount and timing of withdrawing U: Based on personal financial status and market conditions, formulate a U plan. Do not blindly pursue large amounts of U in a single transaction due to market fluctuations; instead, consider phased and batch withdrawals to reduce risk. For example, withdraw a certain amount of U every so often based on the purpose of funds and market stability.
Stay updated on transaction information: Closely monitor platform notifications, transaction confirmation information, etc., to ensure transactions proceed normally. If any transaction anomalies are detected, such as prolonged unconfirmation or funds not received, promptly contact platform customer service for verification and resolution. Also, keep an eye on the counterparties' dynamics; if they show unusual behavior, such as refusing to communicate or delaying transactions, raise your guard and terminate the transaction if necessary.
