The unfamiliar number on your phone screen is flashing; when you pick up, you hear, 'Hello, we are from the police department,' and your heart may skip a beat—especially right after you just completed a USDD transaction.
Receiving a call from the police inquiring about cryptocurrency transactions can instantly cause panic, leaving even the most seasoned traders momentarily blank. But emotions are the greatest enemy, and knowledge is the hardest armor. An inappropriate response could plunge legitimate transactions into months of account freezes.
The key is understanding: the goal of law enforcement is usually not you, but tracking illegal money flows. Your calmness and level of cooperation directly determine whether this is a simple ten-minute clarification or a lengthy legal entanglement.
01 First response determines fate: Your words are being recorded.
When the person on the other end identifies themselves, your first sentence has already set the tone for the entire conversation. Take a deep breath and remember the core principle: Cryptocurrency transactions between individuals are not illegal in themselves.
You can clearly and calmly state: 'I am an ordinary cryptocurrency holder/trader, engaging only in legitimate asset exchanges between individuals, and I do not understand or have ever participated in any illegal activities.'
The focus of law enforcement's attention is often the source and final destination of the funds. If your trading counterpart is involved in scams, money laundering, and other behaviors, and your wallet happens to become a node in the flow of funds, you may be drawn into an investigation. However, this is fundamentally different from 'direct involvement in crime' — the former requires your cooperation to clarify, while the latter may face legal consequences.
What differentiates these two is your current reaction, the evidence you can provide, and the attitude you display, which should be cooperative rather than confrontational.
02 When asked for a refund: Cooperation is the only shortcut.
A common scenario is: The police inform you that a certain payment you received is related to a case and require you to refund it. In this situation, any emotional argument, delay, or refusal is the worst choice.
The correct response is: 'I understand and am willing to fully cooperate with the investigation to clarify the facts. Please tell me the specific official process and required documents, and I will prepare them immediately.'
Immediately provide all on-chain evidence:
Complete transaction record (TxID hash value).
Screenshot of wallet addresses (your address and the counterparty's address)
Detailed correspondence of timestamps and amounts.
In the blockchain world, transaction records are public, transparent, and immutable, which is actually your advantage. Actively providing this information can quickly demonstrate the objectivity and passivity of your transactions. Cooperating with investigations usually won't leave a record, but not cooperating may lead to a simple 'involved account' being upgraded to a 'suspect account', triggering a complete freeze.
03 Clear understanding of two types of freezes: worlds apart.
Many people confuse two completely different legal situations because of fear, leading to overreactions.
Situation 1: Identified as a participant suspected of illegal activities.
The consequences may be that all associated bank accounts, payment tools, and even digital wallets are frozen, with the unfreezing process being long and complex.Situation 2: Identified as a 'good faith receiver' or 'passive party involved'.
Usually onlyfreezes the single receiving account or address directly related to the involved funds.After providing evidence and clarifying, other assets are not affected, and the processing speed is much faster.
The situation you are in largely depends on your performance while receiving the call and the level of cooperation afterwards. Silence, lying, or confrontation can quickly push you from the second situation to the first.
04 The 'dual nature' of USDD and on-chain transactions.
When transactions involve decentralized stablecoins like USDD, the situation has its peculiarities. On one hand, all USDD transfers are publicly traceable on the blockchain, providing a clear trail for self-innocence. You can show law enforcement the complete on-chain transfer path to prove the origins and destinations of the funds.
On the other hand, the decentralized nature also means that once involved USDD is transferred to your decentralized wallet, the coordination process for recovery and refund may rely more on your personal proactive actions, unlike centralized exchanges where the platform can directly assist with freezing and transferring.
This requires holders to have a higher sense of responsibility and management capability. The security of your private key management not only concerns asset theft prevention but also affects the efficiency of your cooperation with judicial investigations in extreme cases.
05 Prevention is better than response: The 'three no principles' before transactions.
Long-term security comes from prior caution. Before every transaction, especially over-the-counter (OTC) transactions, please silently recite the 'three no principles':
Do not engage with anonymous counterparts: Prioritize trading with parties who have undergone some verification and have a long history of trustworthy transactions.
Do not accept ambiguous funds: Be highly vigilant about payment requests with unclear sources and questionable reasons to avoid becoming a 'transfer station' for money laundering.
Do not associate with high-risk addresses: Use blockchain explorer tools to simply verify if the other party's wallet address has been marked as related to scams, hacking, or other illegal activities.
Cryptocurrency is a marathon; surviving is more important than running fast in any single instance. Establishing secure habits is the greatest responsibility towards your own assets.
The call may be hung up, but the correct response will protect your dual security in both the digital world and the real world. Navigating the crypto world, the on-chain record is your nautical log, while a calm and clear mind is the ballast of your unsinkable ship.
When the screen flashes with an unfamiliar call again, I hope you can remember that true security does not come from luck, but from the calm confidence that comes from understanding the rules.