In the cryptocurrency circle, whether you are a newcomer or an experienced veteran, cash withdrawal issues are always a major concern. Newcomers often worry about being obstructed from withdrawing funds, while veterans fear encountering dirty money, leading to their bank cards being frozen and funds being trapped.
Today, I will thoroughly analyze the risks of large withdrawals in the cryptocurrency circle, and how to cleverly avoid being controlled by banks, providing you with a wealth of practical information. If you watch patiently, you will definitely gain something!
Withdrawal situations for small transactions by newcomers
For newcomers, if they are only conducting small transactions, there is actually no need to worry excessively about withdrawals. The domestic OTC market adopts a point-to-point (C2C) trading model, with both buying and selling, and flexible and diverse trading forms, ensuring that the C2C trading method will continue to exist.
Currently, the C2C trading markets of Binance and OKX are relatively stable. As long as you choose reputable merchants and are not tempted by small profits, cashing out is not difficult.
The cash withdrawal pain point for old-timers in the cryptocurrency circle - bank cards being frozen (receiving dirty money)
This is indeed the most troublesome issue for old-timers in the cryptocurrency circle. Next, we will delve into all the key aspects related to dirty money.
What exactly is dirty money
In the C2C trading market, under normal circumstances, there should not be a significant discrepancy between the buying and selling prices. Assuming the market exchange rate of USD to RMB is 6.34, theoretically, you can buy 1000 USDT at this price and then sell it at 6.38.
This way, you can easily earn 0.04×1000 = 40 USD, equivalent to about 280 RMB, seemingly able to cycle through arbitrage continuously. But in reality, the market mechanism will quickly balance the interest rate difference, and if there is an abnormal situation where the buying price is lower than the selling price, it is likely that the funds paid by the merchant who sells USDT at 6.38 (the market price) have problems.
This means that these funds may be dirty money. Merchants are willing to buy USDT at a cost higher than the market price to launder dirty money, and if you unknowingly trade with them, you may become an accomplice in laundering.
As early as 2018 and before, the C2C market was relatively regulated, but later, with rampant illegal activities such as telecom fraud, a large amount of dirty money attempted to be laundered through the cryptocurrency C2C market. Now, public security agencies are heavily investigating dirty money, and once a bank card is found to have dirty money flowing through it, it is usually frozen directly to assist in the investigation.
The significant characteristics of dirty money
Dirty money is like an infectious disease, with strong infectivity and latency, making it difficult to detect on the surface. This is specifically reflected in the following two aspects:
High infectivity: Once a bank card receives dirty money, it is like being 'infected' and is very likely to be frozen. Moreover, transferring funds from this card to any other bank card will also pass on the 'infection' to the new card, leading to the new card facing the risk of being frozen.
Latency: Before a bank card is frozen, you cannot know which card or which funds have problems. It is only when the bank takes freezing measures that the existence of the problem is discovered, making it very difficult to guard against dirty money.
Effective strategies to deal with dirty money during withdrawals
Choose merchants carefully: When withdrawing funds, be sure to select merchants with high transaction volumes, a long registration time, and normal prices (selling prices below market buying prices).
Generally, merchants with transaction volumes exceeding 2000, registered for over a year, and reasonable prices are relatively reliable. In contrast, merchants with low transaction volumes, registered for less than a month, and abnormally high prices often have problems, so don’t be tempted to trade with them for small gains.
Use isolation cards wisely: Use unused empty cards to receive withdrawal funds, and the amount received on each card at one time should not be too much. At the same time, try to have each card only transact with one merchant, and after the funds arrive, isolate that card for 1 - 3 months. If the card has not been frozen during this period, then transfer the funds to the main card.
Since we cannot know for sure which merchant's funds have problems, this method purely reduces the probability of being frozen. Even if a certain isolation card is unfortunately frozen, the loss is within a controllable range, and targeted handling can be done later.
How to deal with a frozen bank card
Previously, I wrote a detailed article introducing the methods and steps for unfreezing a frozen bank card, which everyone can refer to. Generally speaking, when a bank card is frozen, the first step is to remain calm and promptly contact the bank to understand the reason and duration of the freeze.
If the card is frozen due to involvement with dirty money, you may need to cooperate with public security investigations, providing relevant transaction records and other materials to prove the legality of your transactions.
During the process, be sure to be proactive and follow the requirements of the relevant departments to strive for a quick unfreezing of the bank card.
Advanced thinking: Diversified cash withdrawal strategies
Using USD exchanges: If you have substantial funds and need USD, consider opening an account at the USD exchange Kraken. Withdraw USDT to that exchange, cash it out as USD, and then withdraw the USD to your USD card.
This method can effectively bypass domestic banks' strict regulation of RMB funds, reducing the risk of bank cards being frozen due to dirty money issues.
Funds diversion handling: After receiving withdrawal funds, do not immediately leave them idle in the bank card. You can choose to use these funds to pay off credit card debts, repay loans, or invest in financial products or the stock market.
Since the funds are in a liquid state and used for legitimate and compliant economic activities, the probability of being frozen is lower compared to simply being stored in a bank card.
Bank card usage suggestions: During the cash withdrawal process, using a bank card for transactions is relatively safer. Although Alipay and WeChat Pay are widely used in daily life, they do not reduce the risk of being frozen in cryptocurrency cash withdrawal scenarios.
Because when banks monitor the flow of funds, they pay close attention to funds involved in virtual currency transactions, whether through bank cards or third-party payment platforms, and bank cards have relatively more advantages in terms of fund tracing and transaction record retention.