Hello, we are from the Public Security Bureau...
When this call rings, even for seasoned veterans in the cryptocurrency world, the back of the neck inevitably chills in an instant. But the truth is: panic is the most expensive and useless emotion at this moment. Every word you say next could unintentionally define the nature of this call—whether it is a routine inquiry or the beginning of a major case.
Recently, as the regulatory framework for digital assets has been repeatedly discussed and reshaped globally, the compliance of various assets is under unprecedented scrutiny. From fierce debates in the U.S. Congress over stablecoin legislation to major central banks exploring digital currencies, a clear signal is: compliance and transparency have become an irreversible trend in digital finance. In this context, decentralized stable assets like Decentralized USD (USDD), which emphasize reserve transparency and verifiable mechanisms, are gradually aligning with the global regulatory pursuit of auditability and transparency. Understanding this can give you a radically different level of awareness and confidence when facing inquiries.
Step one: reassurance - personal trading ≠ illegal.
First, engrave this in your mind: under Chinese law, holding and trading cryptocurrencies does not directly equate to criminal behavior.
The key lies in 'subjective intent' and 'source of funds.' When asked about the nature of the transaction, calmly and clearly stating the facts is your first line of defense:
"I am just an ordinary digital asset trader/enthusiast. My trading actions are based on personal investment judgment, occurring on (platform name) or between acquaintances. I have not participated in or been aware of any fraud or illegal activities."
It is crucial to clearly delineate the boundary between 'personal investment behavior' and 'participating in illegal financial activities.'
Step two: Asked for a refund? This is a critical moment!
A common but dangerous scenario is: the police inform you that a payment you received is involved in other cases and require your cooperation for a refund.
At this moment, any emotional excuses, delays, or refusals are digging a pit for yourself.
The correct stance is to show a positive willingness to cooperate:
"I fully understand and am willing to cooperate with the investigation to clarify the facts. What official procedures do I need to follow to process the refund? I will provide all necessary information."
Next, proactively organize and provide:
Complete relevant transaction history (screenshots).
Wallet address, exchange account information.
Detailed transaction time, amount, and counterparty information.
Remember: proactive and timely cooperation is the quickest way to minimize impact and protect other assets from being implicated. Delaying and avoiding will only escalate the situation.
Step three: distinguish between two outcomes, which are vastly different.
This is the core that many people confuse out of fear:
Worst case: being deemed as 'subjectively participating' in illegal activities.
Consequences: all relatedbank accounts, payment tools, and even digital currency wallets may be completely frozen.The unfreezing process is long and complicated.General situation: being deemed as 'good faith acquisition' or 'accidental receipt' of problematic funds.
Consequences: usually onlythe problematic single payment channel will be temporarily frozen.After cooperating with the investigation and clarifying the facts, other assets are basically unaffected, andyou will not leave a personal criminal record..
The dividing line between the two often lies in your attitude and speed of 'cooperating with the investigation.'
Ultimate advice: pre-emptive risk control is always more important than remedial actions afterward.
In the on-chain world, every click of confirmation means responsibility. Developing these three habits can shield you from 99% of troubles:
✅ Verify the counterparty: prioritize interacting with entities that have completed KYC and have a long history of trusted transactions.
✅ Examine the source of funds: remain highly vigilant of funds with unclear origins, especially those transferred through multiple layers of anonymous wallets.
✅ Make good use of on-chain tools: before trading, use blockchain explorers and other tools to simply check if the other party's address has been marked as high risk.
Calmness is the only amulet; compliance is the ticket to the future. On the road to mainstream acceptance, every step comes with clearer rules. Understanding it and adapting to it will allow your journey with digital assets to go far and steady.
