A "Must-Take Course" in the Crypto Circle: How to Calmly Handle Asset Recovery and Unfreezing

Navigating the dark forest of Web3 and facing sudden regulatory risks, Mankun lawyers help you gain insight into trends and avoid common pitfalls!

Every Thursday at 8:00 PM, the Crypto Tavern opens on schedule! From investment jargon and startup stories to commentary on hot topics, sector forecasts, and compliance risk avoidance, we use an AMA format to discuss what you want to hear, featuring a gathering of industry experts! Topics are unlimited for relaxed conversation.Web3Many people remark that we are walking through the dark forest of Web3, facing on-chain hacker attacks and sudden regulatory risks. Don’t panic! Senior lawyers from Mankun Law Firm will help you gain insight into trends and avoid common pitfalls!

This is the 18th episode of the Crypto Tavern, with the themefocusing on the most troubling issues for crypto community members—asset “freezes” and “thefts.”On the first workday after the short holiday, we have invited two OG-level experts in the fields of asset recovery and unfreezing,to share common scenarios and response strategies for frozen bank cards and on-chain assets, helping everyone move from panic to composed responses!

 

The tavern is open; please introduce our guests!

Meg:We are delighted to have two OG-level experts—Teacher Ann and Juzuo—who bring extensive practical experience to teach everyone how to respond! I am the host, Meg. I entered the industry in 2017 and have focused on Web3 compliance matters, working across exchanges, mining farms, payment services, and now at Mankun Law Firm.

Juzuo:Hello everyone, I am Juzuo. I started my Coinback asset recovery business last year; detailed information is available on my homepage. I specialize in scenarios such as cracking hardware and software wallet passwords, handling exchange risk-control freezes, and judicial freezes, having accumulated many successful cases. Helping people solve problems while generating revenue is a win-win situation. After a year in this field, I believe it is a blue-ocean market worth deep cultivation. Please follow my WeChat Official Account “Crypto Intelligence Bureau” and my WeChat Channels account “Juzuo.” If you have similar needs, feel free to contact me directly for discussion at any time!

Ann：Hello everyone, I am Ann, based in Changsha. After returning to China last year, I have been engaged in judicial asset-unfreezing services. I operate both a legal services company and a law firm. Since entering the industry, I have encountered scenarios involving the freezing of bank cards, exchange accounts, and on-chain assets during fiat-to-crypto and crypto-to-fiat transactions. I have accumulated a substantial number of cases, with clients successfully achieving asset unfreezing on a daily basis.

It has been fortunate to enter this blue-ocean sector, as it allows me to help people resolve issues while seizing business opportunities. We specialize in the judicial unfreezing of bank cards and digital currencies, providing compliance and unfreezing solutions for funds. It is an honor to connect with everyone through Mankun Law Firm. You are welcome to visit Changsha for in-person discussions.

Meg:Teacher Ann’s in-person sharing was highly informative, covering passive exposure scenarios and details on avoiding pitfalls, packed with practical insights. I will provide a brief introduction before moving to the main topic.

 

Q1: What are the common scenarios involving “asset freezing” and “theft”?

Meg:In the crypto circle, asset freezing and theft often seem to be matters of time and probability. Many individuals fail to adhere to compliance standards,OTCclick on suspicious links, or indiscriminately scan QR codes in Telegram groups, resulting in the immediate loss of their wallet assets. In 2023, I clicked on an incorrect link on X (formerly Twitter) and lost several thousand US dollars, only discovering the loss a month later. Teacher Ann, please first share the common scenarios involving the freezing of bank cards, exchange accounts, and on-chain assets, starting with bank cards.

Ann：Asset freezing can be categorized into two main types:bank card freezing and on-chain/exchange account freezing.Bank card freezing occurs in three scenarios.

• Judicial freezing:Initiated bypublic security organs, economic crime investigation departments, courts, or tax authorities, often triggered by funds involved in cases. For example, online gambling, fraud, and buying or sellingUSDTvirtual assets, particularly withdrawals from online gambling platforms, may involve problematic funds. Gray-market activities such as currency exchange, fabricating transaction records (to increase personal credit limits or secure corporate loans), participating in illegal payment-settlement schemes, and money laundering are also prone to freezing. In one case, a client sold USDT, and the buyer noted “USDT trading” in the transfer remark; the bank card was frozen seconds after the transfer.

• Bank risk-control freeze: The bank’s internal systemdetects anomalies, such as frequent large-volume receipts and payments, late-night transfers, or transfers involving multiple parties (especially strangers or cross-border funds).

• Third-party payment platform freeze:Such asWeChat Pay, Alipay, JD Finance, and UnionPay QuickPass, often triggered by linking to suspicious platforms or risky transactions. For instance, a person born after 2000 engaged in late-night gambling with frequent deposits and withdrawals, repeatedly operating between 3:00 a.m. and 5:00 a.m., resulting in a temporary system freeze of the account.

According to data released by the Ministry of Public Security, in 2024, public security organs nationwide investigated and handled 73,000 cases involving cross-border gambling and related activities, shut down more than 4,500 online gambling platforms, and arrested over 11,000 suspects! Therefore, do not lend, lease, or sell bank cards; do not participate in illegal payment-settlement schemes or fake-order brushing; retain transaction vouchers; and clearly indicate the purpose in transfer remarks.Judicial freezes are the most complex and require professional handling; bank risk-control freezes and third-party payment platform freezes are relatively straightforward and can be resolved through appeals.

Meg from Mag:Teacher Ann’s frontline experience is highly substantive! She provided a thorough explanation of judicial freezes, bank risk control, and third-party payment freezes. I am aware that the Chongqing police cracked a major cross-border online gambling case (dismantling seven platforms under the “DC” Group, arresting more than 3,700 agents, and raiding more than 4,300 domestic locations), with frozen funds involved in the case exceeding RMB 300 million. This indeed caused significant negative social impact. Next, please ask Juzuo to supplement scenarios involving on-chain theft or freezing.

Juzuo:On-chain freezes ultimately involve bank cards; withdrawing funds to a card may trigger issues. Let me add one scenario:Receipt of funds involved in a case.For example, you withdraw funds and receive money, but it may belong to a victim. The bank’s system identifies an issue, and the relevant authorities will summon you for questioning. This is the reason behind “being held accountable upon withdrawal”: the source of funds is tainted, and regulators must safeguard property security. The situation is complex, so I will keep this brief. On-chain theft is more common. In 2021, I had USD 200,000 stolen by someone close to me, so I can relate. Typical scenarios include:

• Downloading fake wallets.Searching for MetaMask or Trust Wallet on Baidu yields entirely fake versions with backdoors, exposing seed phrases. Hackers will “farm” victims, waiting until sufficient funds are deposited before transferring them away.

• Accidentally clicking authorization links.Yesterday, a key opinion leader (KOL) clicked a pop-up authorization link and lost several thousand US dollars. The situation was further complicated because their wallet also held DeFi assets; the address was flagged, and any incoming funds could be front-run by scripts.

• Scanning QR codes when buying or selling USDT.Do not scan unknown QR codes. They may be disguised as payment collection codes (similar to those of Binance or OKX) but are actually authorization codes. Once scanned, assets can disappear instantly.

• Insufficient awareness of fraud prevention.For example, an elderly gentleman was bullish on Ethereum but lacked the technical know-how to operate a wallet, so he asked a younger person to assist; his mnemonic phrase was backed up by that person, and the funds were subsequently lost. In 2021, I had assets stolen by an acquaintance; although I recovered a portion, the cost of recovery was extremely high. There are also fake airdrops and fraudulent projects, such as the early “TRON airdrop” scams, where clicking a link would compromise your assets. With the proliferation of projects today, scammers’ tactics continue to evolve. Off-chain crimes committed by acquaintances are also common and difficult to guard against. Remember: safety is the top priority! Key precautions include downloading applications only from official websites, avoiding random clicks, refraining from scanning unknown QR codes, and exercising caution with airdrops.

Meg:Juzuo’s “dark forest” metaphor is spot-on!Fake airdrops, malicious authorization via QR code scanning, and crimes committed by acquaintances are all difficult to guard against.“Safety is the top priority” is a classic reminder! You may consult Juzuo, Teacher Ann, or Mankun Law Firm; our professional team can assist with asset unfreezing and recovery.

 

Q2: How should one calmly respond to frozen or stolen assets?

Meg:Many people panic when their assets are frozen or stolen. During this year’s Spring Festival, a small amount of funds in my Alipay account was frozen; I called the public security authorities but could not obtain any information about the freeze, and the matter was ultimately left unresolved. The panic is even greater when the amount involved is substantial. Let us now invite Teacher Ann to share the steps and experience for handling freezes on bank cards and third-party payment accounts.

Ann：Do not panic if your assets are frozen;first determine the type of freeze, and then take targeted action.

• Judicial freezes are initiated by public security organs, courts, or procuratorates, commonly due to involvement in illicit funds, such as those related to telecom fraud, online gambling, or the buying and selling of USDT.Case Example: A client engaged in the sale of alcoholic beverages received payments exceeding RMB 20,000. However, their corporate bank account, holding over RMB 1 million, was frozen due to its involvement with funds linked to fraud, thereby affecting liquidity. In handling such matters, one must ascertain the freezing authority, the reason for the freeze, the official document number, the amount frozen, and the date of the freeze. For personal bank cards, contact the bank by phone to obtain contact information for the relevant judicial authorities; for corporate accounts, the legal representative must present their identity card and business license at the bank counter to inquire about the freeze.If the source of funds is legitimate, provide transfer records, contracts, and screenshots of communications, and submit an application for unfreezing; if necessary, pursue legal remedies. If the source of funds is uncertain or if there is concern about being questioned, engage a professional legal services company or law firm to handle the matter on your behalf to mitigate risks.

• Freezes imposed by banks for risk control purposes are relatively straightforward to resolve. They are typically triggered by frequent large-value transfers or abnormal account activity, and the account may be automatically unfrozen within 24 to 48 hours.If the account is not unfrozen automatically, bring your identity card, bank card, and transaction vouchers to the bank counter to explain the circumstances. Unfreezing may also be completed online through facial recognition verification.Freezes imposed by third-party payment platforms (such as WeChat Pay and Alipay) follow a similar pattern, often triggered by involvement in gray-market activities or abnormal transactions. Open the help center within the app, upload your identity card and complete facial recognition verification to file an appeal. If this proves ineffective, send a lawyer’s letter demanding an explanation of the reasons for the freeze, or seek assistance from a professional institution.

Note: Do not frequently urge the bank or file police reports prematurely. Understand the situation in advance and follow professional procedures.Do not trust advertisements claiming “instant unfreezing through internal channels.” Preserve evidence such as transfer records and Telegram screenshots. A freeze does not mean the funds have disappeared; identifying the cause and responding in accordance with the law are key. We have handled tens of thousands of bank card unfreezing cases, with a success rate exceeding 95%, including resolutions for large amounts.

Meg:Teacher Ann’s steps are clear, and the 95% success rate is impressive! The case involving the sale of alcohol is striking; investigating the cause and following proper procedures is the right approach. Next, please invite Juzuo to share strategies and experience for recovering assets stolen on-chain.

Juzuo: Recovering assets stolen on-chain is highly difficult; prevention is better than cure!In 2021, I had USD 200,000 stolen by an acquaintance. Although part of the funds were recovered, the time and effort costs were extremely high. Response strategies vary depending on the scenario.

• If the theft resulted from a phishing attack leading to the leakage of seed phrases, there is essentially no remedy; you must immediately transfer any remaining assets to a new wallet.

• Unauthorized access due to compromised authorization, such as a key opinion leader (KOL) inadvertently clicking on a pop-up window, requires promptly checking the wallet, suspending decentralized finance (DeFi) operations, and attempting to transfer assets before malicious scripts can act, though this often proves too late.

• Theft of DeFi assets is more complicated; hackers use scripts to monitor addresses, seizing funds immediately upon deposit. This requires analysis by a technical team to develop targeted response plans, testing both intellect and courage.

Cases involving insiders or acquaintances may be addressed through judicial channels.Case example: An employee stole 10 BTC from a peer firm. Due to unfamiliarity with Apple devices and VPNs, the employee backed up the mnemonic phrase and transferred the assets away. We initiated judicial proceedings, leading to the employee’s surrender and partial recovery of the assets.The key to recovery is tracing the path of the stolen assets, preserving transaction records and authorization logs, and reporting to the police or engaging professional teams when necessary.

Preventive measures include:Download wallets only from official websites and verify links; do not click on unknown links or scan QR codes; participate in airdrops with caution; store mnemonic phrases offline and keep them away from operations by acquaintances.I often help members vet download links, prioritizing security above all.

Meg:The case of theft by an acquaintance was shocking; prevention is less troublesome than recovery. In 2023, I clicked the wrong link on X (formerly Twitter) and lost several thousand US dollars, only discovering it a month later. Web3 is a dark forest characterized by information asymmetry and numerous professional scammers. I will also share a case: an employee once stole 10 BTC from a peer firm, and surrendered after judicial authorities opened a case. If the theft is not due to on-chain issues, and fake wallets, unauthorized approvals, and QR code scanning are ruled out, it is highly likely a case of insider or acquaintance theft. Prioritize security; seek professional assistance from Juzuo, Teacher Ann, and Mankun Law Firm for expert intervention!

 

Q3: Could you recommend a book or movie on blockchain investment?

Juzuo:Ray Dalio’s bookPrinciples, which discusses investment logic and risk management, is suitable for participants in the crypto asset sector to reflect on bubbles and common sense. Nassim Nicholas Taleb’s series of books are also worthwhile reads, as they address uncertainty. For films, we recommendThe Wolf of Wall Streetand Margin Call. The Wolf of Wall Street realistically portrays the expansion and bursting of a bubble, along with the reactions of various parties;

Margin Call examines the bond market bubble prior to the subprime mortgage crisis. Crypto assets would not even rank at a D grade in terms of asset rating, indicating an extremely large bubble! Recently, Binance has seen intense speculation in “meme coins,” with market capitalizations soaring to hundreds of millions. However, compared to the Solana ecosystem, their growth ceiling is far lower. Many people lack reverence for financial markets, assuming that profits are guaranteed upon entry. If bonds can create significant holes, the crypto asset sector must respect common sense even more! Watch these two films to learn how to remain clear-headed while participating in a bubble, rather than becoming mere consumers of the bubble!

Meg:Investment should not be pursued blindly. Drawing on traditional private equity valuation models can help avoid many pitfalls! For instance, Polymarket received a USD 2 billion investment from the parent company of the New York Stock Exchange. This demonstrates an increasingly evident convergence between Web2 and Web3. Next, we invite Professor Ann to speak.

Ann：I have experienced many investment failures, firmly reflecting a retail investor mindset prone to losses. I recommend The First Lesson in Investment,the core of which is learning how to avoid losses, rather than rushing to make profits.I entered the crypto space in 2016–2017, operating exchanges and engaging in mining. Although the capital volume was substantial, I frequently made mistakes: selling profitable holdings while averaging down on losing positions. As a result, my holdings of BTC and ETH dwindled, while I accumulated large positions in low-quality tokens that subsequently fell by 99%!My epiphany: risk management and asset allocation are more important.The crypto asset sector accounts for less than 5% of the global secondary market capitalization (approximately USD 5 trillion versus USD 140 trillion), indicating substantial room for growth. However, attention must be paid to liquidity factors (such as non-farm payroll data, interest rate cuts, and the GENIUS Act) as well as product profitability.Ecosystems such as those of Binance and HyperLiquid demonstrate strong application utility. Long-term compounding and value investing are key; avoid blind herd behavior.

I regularly monitor the 999 Index and the Fear and Greed Index. I maintain a position size of 40%–50%, allocated to gold and U.S. Treasury bonds, which provides stable returns and peace of mind. I also hold certain mainstream crypto assets. I have not generated profits from short-term trading; long-term investment offers greater reassurance. Learning how to avoid losses is the first step in risk mitigation.

Meg:Special thanks to Instructor Ann and Juzuo for their in-depth insights! From scenarios involving frozen or stolen assets to response strategies and fundamental investment knowledge, the content was highly informative. We encourage everyone to follow Instructor Ann and Juzuo. For professional and secure handling of frozen or stolen assets, please contact a specialized team.