Pay attention to the following points to effectively prevent receiving illicit funds that could lead to card freezing:
(1) For OTC transactions, try to choose large platforms like Binance and OKEx. These platforms have good communication channels and risk control measures with mainland regulatory and law enforcement agencies.
(2) Try to choose OTC platforms that support T+1/T+2 withdrawal strategies. Although you cannot withdraw immediately after selling coins, it reduces the risk of being implicated in money laundering through OTC transactions. For example, Binance T+1, Huobi Strict Selection Trading (compared to free trading, T+2 withdrawal).
(3) Avoid directly using stablecoins like USDT for OTC transactions; try to use mainstream coins like BTC and ETH for OTC transactions.
(4) The bank card used for OTC transactions should be a separate card that is usually not used, and kept separate from the salary card. This way, even if it is frozen, it will not affect the use of other funds, making it easier to explain the flow of funds during investigations.
(5) For OTC transactions, try to use local bank cards, such as those from local urban commercial banks or rural commercial banks. Large and medium-sized joint-stock commercial banks, such as Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and China Merchants Bank, have branches nationwide, making it easier for law enforcement agencies to freeze them directly.
(6) Do not frequently trade with fixed merchants, and do not frequently trade with fixed users. If the same user makes indirect purchases of more than 3 transactions within a day, or buys and then sells a few hours later, it will be very dangerous and has a high suspicion of money laundering.
(7) Find reliable OTC merchants for transactions. Try to actively take large orders from major merchants and do not place too many orders; avoid merchants from problematic areas. In fact, as an ordinary user, it is very difficult to discern which merchants are reliable. For example, many friends who traded with Huobi Blue Shield service merchants also had their cards frozen.
(8) Reduce the frequency of withdrawals and increase the cashing amount.
(9) After OTC transactions, do not transfer to your other bank cards to avoid contaminating other funds, which could complicate cooperation with investigations. If you urgently need money, you can withdraw cash from an ATM or spend it online.
(10) Try to choose workdays for cashing out. It is best to conduct transactions during normal working hours, such as between 9 AM and 9 PM on weekdays.
(11) Do not transfer immediately after receiving payments. After selling USDT for RMB, do not transfer it out immediately; keep it in the account for a while.
If your card is unfortunately frozen, how should we explain to prove that we have not participated in money laundering activities?
(1) The individual is engaged in normal Bitcoin buying and selling transactions and does not involve money laundering or other illegal transactions;
(2) The individual is unaware of any criminal allegations related to debts received from selling coins;
(3) Cooperate to provide all transaction records, chat records, on-chain transfer records, etc.;
(4) The individual must be very clear that engaging in digital asset transactions does not violate the law.
For OTC transactions, if the cash-out bank card is frozen by public security and judicial authorities, what materials will the other party require to lift the freeze?
Commonly required documents mainly include: complete transaction records, such as bank card transaction statements, on-chain transaction records, trading platform order records, WeChat chat records (including details of the transaction process), and other evidence that can prove the legality of assets, even income proof, etc.
So, if you unfortunately receive illicit funds and your card gets frozen, how should you resolve it?
First, go to the bank where the account was opened to understand the reason for the card freeze and identify the authority responsible for the freeze.
The reasons for card freezing can be summarized into two types: bank risk control and public security freezing:
1. Bank risk control. Bank risk control may be triggered by frequent large transfers with the card recently, scattering deposits and concentrating withdrawals, concentrating deposits and scattering withdrawals, quick in and out transactions, frequent night transactions, and not leaving a balance in the account, collectively referred to as transaction anomalies. This triggers the bank's anti-money laundering risk control system.
2. Public security freezing. Usually, this occurs when the account has received other involved illicit funds, which may have been received directly or flowed indirectly. The public security will freeze all associated accounts that have involved transaction flows to prevent fund transfer and facilitate case investigation.
How to resolve the two types of card freezing?
1. Regarding bank risk control freezing:
Bring your ID card and bank card to the bank where you opened the account to communicate and submit relevant transaction proof. If it involves public security policy directives, you will also need to cooperate with investigations at the local public security department. If the anti-fraud center's monitoring is triggered, you will need to fill out the anti-fraud application form required by the anti-fraud department and pass the review to unfreeze.
2. Dealing with public security judicial freezing:
Observe for 3 days first. See if the temporary freeze has turned into a formal freeze (continued freeze for half a year). If it turns into a formal freeze, go to the bank as soon as possible to inquire about the name of the public security unit that froze the card, the case number, and the name of the police officer responsible for the case. Then contact the responsible police officer to understand the reason for the card freeze and cooperate with the police investigation. After verifying that you have not committed any illegal or disciplinary acts, your account will be unfrozen.
