Hello everyone, I am Paul, currently sharing my insights about the cryptocurrency world at Binance Square. If you find what I say helpful, you can follow me.
Amin is an ordinary worker who usually enjoys dabbling in the cryptocurrency world. One day, he saw someone in a WeChat group urgently buying USDT at a price slightly higher than the market. The other party said:
'Bro, please help me sell some U, I'll transfer the money to your bank card immediately, no delays.'
Amin thought, isn't this just a way to earn a little commission? So he immediately sent the USDT and received the other party's transfer.
At first, everything was normal.
Months later, Amin suddenly found his bank card frozen, and the bank called to say:
'Your account is involved in a fraud case, and you need to cooperate with the investigation.'
Amin was confused:
'I was just selling coins normally; how did I get involved in fraud?'
In fact, he unknowingly became a part of the 'money laundering trilogy.'
1. What exactly is money laundering?
Money laundering refers to taking 'dirty money' obtained through fraud, drugs, smuggling, etc., and 'cleaning' it through a series of operations to make it look legal.
When the police are tracing fraud funds, they won't care if you knew or not; as long as your account shows the flow of dirty money, you will be treated as a subject of investigation.
2. The 'three stages' of money laundering
1. Placement - Dirty money enters the financial system
Goal: To first 'put' illegal funds (dirty money) into the financial system, making it look like just ordinary money.
Typical operational methods:
Directly transfer money from fraud victims into multiple 'front accounts.'
Through small, frequent transfers (to avoid large sums raising bank alerts).
Use dirty money to buy virtual currencies (like USDT) or recharge to online games or shopping platforms.
Find a 'scoring platform' to help collect funds.
Case: A telecom fraud gang scammed a victim out of 500,000. It's impossible to receive the money directly into their own accounts, so they would distribute it to dozens of ordinary people's bank cards (these people might rent their cards for a few hundred bucks), then use these accounts to buy USDT or transfer. This is 'placement'; dirty money has officially entered the financial system.
2. Layering - Creating complex transaction chains to confuse the eye
Goal: To 'wash away traces' through multilayered transactions, making it difficult for the police to trace.
Typical operational methods:
Transfer back and forth between different bank accounts (even cross-border transfers).
Convert dirty money into USDT, then exchange it for BTC, ETH, and scatter it to different wallets multiple times.
Use OTC, underground banks, virtual asset mixers to obscure the source of funds.
A large number of small transactions create confusion.
Case: The fraud gang first used the victim's money to buy USDT, then transferred it to 20 different wallet addresses, then scattered it across different exchanges, exchanged for BTC, and then transferred it back... When the police trace the on-chain transactions, they will see a large number of jumps, making it much harder to locate. This is 'layering'; dirty money is covered layer by layer.
3. Integration - Dirty money becomes clean money, entering the legitimate economy
Goal: To make the funds 'rightfully' return to the real economy, looking like legitimate income.
Typical operational methods:
Invest in real estate, start a company, turning funds into real estate or equity income.
Spend in casinos or luxury stores, exchanging dirty money for assets.
Use shell companies to conduct 'fake trade,' disguising dirty money as 'export income.'
Through the flow of laundered funds, reinvested for financial management or lending, earning 'legal income.'
Case: Laundered money may appear in a new property in a city, used for home purchases; it may also appear on the books of a 'shell company,' packaged as 'profits from cross-border import and export'; or it may continue to operate in the stock market or funds, looking indistinguishable from normal funds. This is 'integration'; dirty money is thoroughly converted into 'clean money.'
To summarize these three steps: Placement: Dirty money enters the system (the first step to get on board). Layering: Create chaos and distraction (take a detour). Integration: Convert to clean money (arrive at the destination). Ordinary people often unknowingly get involved in the placement or layering stages, for example: you received a transfer from someone to buy U (helping with 'placement'). You exchanged dirty money in OTC (becoming a part of the 'layering' chain).
3. How to avoid becoming the 'scapegoat'
Absolutely do not rent or lend your bank card: Don't let your card be borrowed for a few hundred or thousand bucks. Bank card + phone number + ID card is a complete financial identity; once it's used for money laundering, you are the first responsible person.
Reject 'scoring part-time jobs': Those claiming 'earn commissions while lying down, just help collect and transfer' are 99% part of the money laundering process. If the police catch you, regardless of whether you are the mastermind, they will freeze and investigate you first.
Personal accounts should only be used for personal consumption: If you frequently receive large or unusual funds for a long time, it’s easy to trigger bank risk control.
Try to use regulated exchanges (with KYC): Centralized large exchanges (like Binance, OKX, etc.) have strict risk control, which can help you reduce risk. Completing KYC can prove that the funds are 'self-owned funds' and that transactions have compliance records.
Only accept transfers from accounts with the same name: When selling U in OTC, try to only accept buyers from accounts with your real name. If a stranger transfers a large amount to your bank card, be cautious.
Be wary of 'above-market price' buying and selling: If someone is willing to pay a premium for your coins, there's a high chance it’s dirty money trying to move quickly.
Do not help strangers with 'collection and payment': Requests like 'help collect the money and transfer it to me' or 'help me recharge some U' carry very high risks. Once the funds are involved in a case, you are the first link.
Stay vigilant about 'urgent transfers and urgent trades': The more urgent it is, the more likely it is to be money laundering or fraudulent funds.
Preserve evidence: All transaction records (chat screenshots, transfer receipts, order details) must be kept. Once investigated, you can prove you are a 'good faith third party.'
If your account is frozen, immediately cooperate with the police: Don't panic, and don't refuse. Actively provide evidence to prove you had no subjective criminal intent.
Establish risk awareness: Don't think 'this has nothing to do with me'; ordinary people are the easiest to exploit in the fraud funding chain.
Always remember: There is no such thing as free money in the world.
Alright, that's it for this episode on safety; we'll continue chatting next time. If you're interested, you can follow Paul.
