In the cryptocurrency circle, whether you are a newcomer just starting out or a veteran who has been through many battles, withdrawal issues are always a major concern. Newcomers often worry about being blocked when cashing out, while veterans are more afraid of encountering dirty money, leading to bank card freezes and funds being trapped.
Today, I will analyze the risks of large withdrawals in the cryptocurrency circle in detail, as well as how to cleverly avoid being subject to bank risk control when cashing out. There is a lot of valuable information, and if you watch patiently, you will surely gain something!
Cash-out situations for newcomers' small transactions
For newcomers, if only making small transactions, there is actually no need to worry excessively about cashing out. The domestic OTC market adopts a peer-to-peer (C2C) trading model, with both buying and selling, and the trading forms are flexible and diverse, 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 withdrawal pain point of cryptocurrency veterans - bank card frozen (receiving dirty money)
This is the most troublesome issue for cryptocurrency veterans. Next, let's delve into the various key aspects related to dirty money.
What exactly is dirty money?
In the C2C trading market, under normal circumstances, there will not be a significant deviation between the buying price and the selling price. Assuming the exchange rate of USD to RMB in the market is 6.34, theoretically, you can buy 1000 USDT at this price and then sell it at a price of 6.38.
This way, you can easily earn 0.04×1000 = 40 USD, which is approximately 280 RMB. It seems like you can continuously cycle for arbitrage. However, in reality, the market mechanism will quickly balance the profit margin. If there is an abnormal situation where the buying price is lower than the selling price, it is very likely that the funds paid by the merchant (offering a price of 6.38) for purchasing USDT have issues.
That is, this money may be dirty money. Merchants are willing to buy USDT at a cost higher than the market price to launder the dirty money. Unknowingly trading with them, you may become an accomplice in money laundering.
As early as 2018 and before, the C2C market was relatively standardized. However, later, with the rampant illegal activities such as telecom fraud, a large amount of dirty money attempted to be laundered through the cryptocurrency C2C market. Nowadays, law enforcement agencies have greatly increased their efforts to trace dirty money. Once a bank card is found to have dirty money flowing through it, in order to cooperate with the investigation, that card will usually be frozen directly.
The significant characteristics of dirty money
Dirty money is like an infectious disease, with strong infectivity and latency, difficult to detect on the surface. This is specifically reflected in the following two aspects:
High infectivity: Once a bank card receives dirty money, this card is like being 'infected', and it 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, putting it at risk of being frozen.
Latency: Before a bank card is frozen, you cannot know which card or which funds have problems. Only when the bank takes freezing measures will you discover the existence of the problem, making it extremely difficult to guard against dirty money and leaving people vulnerable.
Effective strategies to deal with dirty money when withdrawing
Carefully choose merchants: When withdrawing, be sure to select merchants with a large transaction volume, a long registration time, and normal prices (selling prices lower than market buying prices).
Generally speaking, merchants with a transaction volume of over 2000 transactions, a registration time of more than a year, and reasonable prices are relatively reliable. Conversely, those with small transaction volumes, a registration time of less than a month, and abnormally high prices almost always have problems, so do not be tempted by small bargains to trade with them.
Clever use of isolation cards: Use infrequently used empty cards to receive withdrawal funds, and the amount received by each card should not be too much at one time. At the same time, try to let each card only transact with one merchant, and after the funds arrive, isolate that card for 1 to 3 months. If the card is not frozen during this period, then transfer the funds to the main card.
Since we cannot be sure which merchant's funds have problems, this method is purely to reduce the probability of being frozen. Even if a specific isolation card is unfortunately frozen, the loss is within a controllable range, and targeted handling can be done later.
Handling methods after a bank card is frozen
Previously, I wrote a detailed article introducing the methods and steps for unfreezing a frozen bank card, which everyone can refer to. Generally speaking, after a bank card is frozen, the first thing to do is to remain calm, promptly contact the bank, and understand the reason and duration of the freeze.
If the freeze is due to involvement with dirty money, you may need to cooperate with law enforcement agencies in the investigation, providing relevant transaction records and other materials to prove the legality of your transactions.
In the process, be sure to be proactive and operate according to the requirements of the relevant departments, striving to unfreeze the bank card as soon as possible.
Advanced thinking: Diversified cash-out strategies
Using a USD exchange: If you have sufficient funds and a demand for USD, you can consider opening an account at the USD exchange Kraken. Withdraw USDT to that exchange, cash it out into USD, and then withdraw the USD to your USD card.
This method can effectively avoid strict domestic bank regulations on RMB funds, reducing the risk of bank cards being frozen due to dirty money issues.
Fund diversion handling: After receiving withdrawal funds, do not immediately leave them idle in the bank card. You can choose to immediately use these funds to pay off credit card debts, repay loans, or purchase financial products, invest in the stock market, etc.
Because the funds are in a liquid state and used for legal and compliant economic activities, the probability of being frozen is lower compared to simply storing them in a bank card.
Bank card usage recommendations: During the cashing out process, using a bank card for transactions is relatively more secure. Although Alipay and WeChat Pay are widely used in daily life, they do not reduce the risk of being frozen in the context of cashing out in the cryptocurrency circle.
Because banks pay special attention to the flow of funds involving virtual currency transactions, whether through bank cards or third-party payment platforms, bank cards have relatively more advantages in terms of fund traceability and transaction record retention.