After selling a batch of USDT, the RMB payment had already been received, but a few days later the bank card was suddenly frozen. Upon contacting the bank, the individual learned that the freeze originated from a public security authority in another jurisdiction, and the reason may be that one of the incoming funds was connected to telecom and online fraud.
When faced with this situation, many people's first thought is to get the card unfrozen: contacting the police to explain the transaction, submitting transaction records, or returning the relevant funds as requested, in the hope of restoring use of the bank card as soon as possible.
But what truly needs to be confirmed first may not simply be "when the bank card can be unfrozen," but rather another, more important question:
Is this freeze merely a measure taken against the account in the course of tracing criminal funds, or has the individual already entered the scope of a criminal investigation because of the USDT transaction?
These two questions are closely related, yet they cannot be handled as one. The more prudent sequence is usually not to focus solely on applying for unfreezing, nor to leave the bank card unattended, but first to complete a basic criminal risk assessment, and then decide how to explain the transaction to the public security authority, whether to apply for unfreezing, and how to handle any potential issues concerning the return of illicit gains and compensation.
A frozen bank card does not mean a crime has already been established
Receiving fraud-related funds after selling USDT means that the transaction has entered the public security authority's fund-tracing chain, but a frozen bank card and the establishment of a crime by the actor are not the same conclusion.
When investigating cases such as telecom and online fraud and online gambling, public security authorities often continue tracing the flow of funds along bank accounts. If case-related funds enter a certain bank card, that account may be frozen as a result. The account holder may merely be a person connected to the case-related funds through a transaction, or may be further investigated as to whether they participated in receiving payments, transferring funds, exchanging virtual currencies, or moving funds.
Therefore, one cannot directly conclude that the individual has committed a crime merely because the bank card was frozen; likewise, one cannot simply treat the freeze as a bank risk-management issue merely because one believes it was a normal USDT sale.
The Interpretation on Several Issues Concerning the Application of Law in the Handling of Criminal Cases of Concealing or Disguising the Proceeds of Crime and the Gains Therefrom, effective as of August 26, 2025, makes clear that the crime of concealing or disguising the proceeds of crime requires, as a precondition, that the actor knew the relevant property constituted proceeds of crime.
In determining "knowledge," a comprehensive review should be conducted in light of factors such as the information to which the actor was exposed, abnormalities in the funds and the transaction, the manner of transfer and conversion, professional experience, relationships with upstream persons, and statements and defenses; a conclusion cannot be reached solely on the basis that the account received case-related funds.
Therefore, the first step after a card is frozen is not to rush to prove "I have not committed a crime," but to first clarify which sum of funds the public security authority is investigating and what position one occupies in the case.
First, confirm: what is the nature of this freeze?
When contacting the bank or the case-handling authority, at a minimum try to confirm the freezing authority, the frozen amount, the freeze duration, the corresponding case, and the specific transaction times that may be involved.
More importantly, it is necessary to determine how the public security authority currently views the account holder: whether the person is merely a relevant individual asked to cooperate in verifying transactions, or whether an investigation has already been opened around the person's long-term transaction patterns, account flows, and the destination of USDT.
If it is merely a single normal transaction that received case-related funds, the transaction price basically conforms to market levels, the payment and token-transfer process was complete, the parties established contact through normal channels, and the individual did not, at another person's instruction, help to split up receipts, pool funds, or transfer virtual assets, then there is usually still room to explain the transaction background and apply for unfreezing.
However, if the individual has long engaged in high-frequency OTC trading, received payments through multiple accounts, had different strangers pay RMB on their behalf, then transferred USDT to designated addresses as required by upstream parties, and collected commissions calculated as a proportion of the flows, the nature of the case may no longer be simply "selling tokens and receiving illicit funds."
Before seeking unfreezing, one must first clearly understand one's own transaction patterns.
Otherwise, explanatory materials submitted by the individual before understanding the case circumstances may well fail to answer the questions the case-handling authority is actually focused on, and may even, due to incomplete or internally inconsistent statements, increase the difficulty of subsequent communications.
When public security authorities assess criminal risk, they usually focus on three aspects
First, whether the transaction background is normal
The case-handling authority will focus on why the individual conducted this transaction, where the customer came from, whether the parties knew each other previously, whether the transaction price clearly deviated from the market, whether the payer and the actual token buyer were the same person, and whether what the individual obtained was a normal trading spread or a fixed commission calculated on the basis of the flows.
The legal risk of an occasional purchase or sale at a normal price with a complete transaction order is clearly different from that of long-term receipt of funds for strangers, exchange for USDT, and collection of percentage-based commissions.
Second, where the funds and USDT ultimately flowed
If the party concerned receives RMB and then transfers USDT it holds to a normal counterparty, and the transactions before and after can be matched to each other, this is not the same conduct as receiving funds through multiple bank cards at another person's instruction and, after purchasing USDT, transferring it in a consolidated manner to a designated wallet.
In a typical case published by the Supreme People's Court, the persons involved, at the instruction of individuals engaged in telecom fraud, provided multiple bank cards to receive funds, then purchased virtual assets through a trading platform and transferred them to an account designated by the other party, while also receiving a percentage commission. The court, taking into account chat records, account operations and the division of roles among the persons involved, found that the persons involved knew that what they were handling was the proceeds of crime.
Third, whether the party concerned knew or should have known that the funds were abnormal
Judicial authorities will usually examine whether the party concerned had accepted abnormal transaction requests, whether multiple persons' accounts were used to receive funds in a dispersed manner, whether the party was asked to delete records or circumvent platform risk controls, whether the party received remuneration clearly higher than normal market levels, and whether the bank card had previously been frozen or flagged as a risk by public security authorities due to similar transactions.
In particular, it should be noted that the first occurrence of an anomaly and continuing to use the same transaction pattern after having already been warned of risk by a bank, platform or public security authority may give rise to a significant difference in the assessment of subjective knowledge.
However, the existence of anomalies does not mean that a crime may be directly presumed.
The 2025 opinions on handling cases of assisting information network criminal activities likewise emphasize that there should be a comprehensive review of the inflow and transfer of funds, illegal gains, the status and role of the actor and subjective culpability, and that objective attribution of guilt based solely on bank card transaction records should be avoided; where the circumstances are obviously minor and the harm is not significant, the act is not deemed a crime in accordance with law.
Why it is not advisable to focus only on unfreezing from the outset
Applying for unfreezing often requires explaining to the case-handling authority the source of funds, the course of the transactions and where the USDT went.
These explanations are not ordinary banking materials; they may enter the evidence system of a criminal case. If the party concerned has not first checked the exchange orders, bank statements, chat records and on-chain transaction records, and explains only from memory, it is easy for discrepancies to arise in time, amount, payer and wallet address.
A more common problem is that, in order to unfreeze as quickly as possible, some people use vague statements such as "I was just passing funds through for a friend", "the account was lent to someone else" or "I don't know exactly who paid". A normal transaction that could have been explained through complete transaction records may instead, because of confused explanations, be understood as receiving and making payments on behalf of others or assisting in the transfer of funds.
Some people, upon discovering that their card has been frozen, immediately delete chat records, cancel their exchange accounts, or ask the counterparty to align their statements. Doing so not only may fail to eliminate electronic data, but may also make it impossible to reconstruct the background of a normal transaction.
Therefore, the so-called "addressing criminal risk first" does not require the party to stop applying for unfreezing; rather, it requires first clarifying what facts and evidence the party should use to apply for unfreezing.
The police demand a refund—will the account be unfrozen once the money is returned?
This is also the issue that most often troubles parties whose cards have been frozen.
Returning the funds involved in the case may help recover the victim's losses and, in some cases, may also become an important factor in lenient treatment. Current judicial interpretations make clear that, where a person pleads guilty and accepts punishment, actively cooperates with recovery, and has statutory circumstances for lenient treatment, plays a relatively significant role in cooperating with the investigation of upstream crimes, or is in other circumstances of a minor nature, the person may, in accordance with law, not be prosecuted or be exempted from criminal punishment.
It should be noted, however, that returning the money does not mean the bank card will be unfrozen immediately, nor does it mean the criminal risk will necessarily disappear.
Before deciding whether to return the money, it is necessary first to verify which transaction the so-called amount involved in the case actually corresponds to, whether the party has already delivered the corresponding USDT, whether all of the funds frozen in the account belong to the funds involved in the case, and what status the public security organ currently attributes to the party.
If the transaction is in essence a normal transaction and the party has already delivered USDT yet is required to return all the RMB unconditionally, the party may face both asset loss and criminal risk at the same time.
Conversely, if the existing evidence already shows that the transaction pattern is obviously abnormal, completely refusing to cooperate with the recovery of illicit gains and the recovery of losses may also affect the handling of the case.
Therefore, whether to return the money, how much to return, and through what procedure to return it cannot be judged solely by whether it can "secure unfreezing"; rather, it must be assessed together with the criminal risk assessment.
Before unfreezing and risk screening, first prepare a "four-dimensional evidence chain"
Before explaining the situation to the bank, the public security organ, or a lawyer, it is advisable first to organize the materials according to the following four dimensions.
These four categories of materials must not be isolated from one another; rather, they must be able to answer the same question: which sum of RMB corresponds to which sum of USDT; who paid the RMB, and to whom the USDT was transferred.
A complete chain of evidence is more persuasive than a single exchange order or a screenshot of a chat segment provided on its own.
What is the more prudent order of handling?
After the evidence has been organized, it is then appropriate to determine whether the party concerned was implicated as a result of an isolated transaction or whether the transaction pattern itself already exhibited abnormal characteristics; and whether the public security authority is focused on a single tranche of fraud-related funds or on long-term transaction flows, upstream and downstream relationships, and fund conversion conduct.
Only on that basis is it appropriate to decide whether the next step should be to submit a written statement of circumstances, apply for the lifting or adjustment of the freeze measures, or first prepare a criminal response centered on subjective knowledge, the amount involved, and the nature of the conduct.
The overall sequence can be summarized as follows:
• Step one: confirm the freezing authority, the amount involved, and the corresponding transactions.
• Step two: preserve complete bank, exchange, on-chain, and communication records.
• Step three: reconstruct the correspondence between RMB and USDT.
• Step four: determine whether you are an ordinary person connected to the transactions or are already being investigated as a criminal suspect.
• Step five: only then decide how to communicate, apply for unfreezing, and whether to address the return of illicit gains and compensation.
Greater caution should be exercised by those who have already received a summons from the public security authority, have been required to travel to another location to explain the circumstances, or have been questioned as to whether they have long been engaged in USDT acceptance and conversion.
At this point, the issue may no longer be merely the unfreezing of a bank card, but rather the determination of liability for the crime of assisting information network criminal activities, the crime of concealing or disguising criminal proceeds, or even complicity in the upstream crime.
Typical cases involving foreign-exchange-related illegal and criminal activities published by the Supreme People's Procuratorate and the State Administration of Foreign Exchange also show that in cases involving virtual assets, the case-handling authorities conduct cross-verification of bank statements, chat records, virtual asset transaction records, wallet addresses and on-chain flows, and electronic data may directly affect the assessment of the business model, the amount involved and subjective knowledge.
Final remarks
After selling USDT and having a bank card frozen, what truly needs to be resolved is not a choice between "unfreezing" and "criminal risk."
The more accurate approach is: first assess the criminal risk behind the freeze, then use that risk assessment to guide the unfreezing application, communications with the police and handling of the return of illicit gains.
If the funds received were case-related funds in the course of ordinary transactions, complete transaction records, a reasonable market price and clear on-chain flows may serve as important evidence to explain the nature of the transaction.
If the transactions already involved payments by multiple persons, abnormal premiums, designated wallets, percentage-based commissions or repeated card freezes, the matter can no longer be treated merely as a bank-card unfreezing issue.
A frozen bank card is a risk signal, not a conclusion of criminality.However, an improper order of handling may also turn a transaction that could originally be explained into an increasingly difficult problem to explain.
Communications with public security authorities in another locality, reconstruction of transaction evidence and handling of the return and compensation of illicit gains involve comprehensive assessment of fiat-currency flows, trading platform records and on-chain data. Before the case-related transactions, one's own identity and the existing evidence have been clarified, it is not advisable to delete records at will, make inconsistent statements, or blindly sign restitution documents.
If you have already received a summons from a public security authority, been required to travel to another locality to explain the situation, or if the account has been frozen multiple times or involves complex circumstances such as payments by multiple persons and receipt of coins to designated wallets, it is advisable to have a criminal lawyer familiar with virtual asset cases assess the transaction chain and personal liability as early as possible.
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*This article is an original article of Mankun Law Firm and represents only the personal views of the author. It does not constitute legal consultation or legal advice on any specific matter. For reprinting and legal consultation, please add our customer service:mankunlawyer。
