Over-the-counter (OTC) trading is a common method of trading in the cryptocurrency market, and many investors choose this method in order to gain access to lower fees and larger trading volumes. The risks associated with OTC trading are not simply market volatility, but also the possibility of illegal funds being involved, or even having your bank card frozen. In this article, we'll take an in-depth look at the causes of bank card freezes due to black money received from OTC Bitcoin trading, what to do about it, and how to safeguard your money in cryptocurrency trading.
Why Bitcoin OTC Trading Receives Black Money?
Over-the-counter (OTC) trading usually refers to the trading of cryptocurrencies between two parties without going through a public exchange. The advantage of this type of trading is that it allows for large transactions without affecting the market price, but it also comes with a higher level of risk, especially if the counterparty is dishonest or has an illegal source of funds. The anonymity and decentralized nature of cryptocurrencies such as Bitcoin makes it easy for criminals to use over-the-counter (OTC) transactions for money laundering. If your counterparty is involved in money laundering, there is a high probability that the funds will trigger your bank's anti-money laundering monitoring system, resulting in your bank card being frozen.
According to the data, many cryptocurrency exchanges already work closely with financial institutions that analyze the flow of funds based on a number of anti-money laundering (AML) indicators. If your bank account receives funds from a suspicious address during an over-the-counter Bitcoin transaction, the bank may consider it illegal and freeze your account for investigation.
Causes and Risks of Bank Card Freezing
One of the main reasons for card freezes is when a bank discovers unusual transactions in an account or signs of illegal activity involving money laundering or fraud. In the case of Bitcoin OTC transactions, if the funds come from an unknown source or are associated with a known suspicious account, the bank's risk control system may automatically freeze the account and require further investigation. According to Taiwan's Financial Supervisory Commission, banks have the right to investigate transactions that may involve illegal activities and may freeze the account if necessary to prevent the loss of funds.
Some banks may take a more conservative approach to cryptocurrency transactions themselves, especially when the transaction amounts are large, and may choose to freeze the cards in the belief that the transaction is risky. This risk is not limited to illicit funds, but in some cases a simple cryptocurrency transaction may be misjudged as suspicious.
How to deal with frozen bank cards?
If you find that your bank card has been frozen, first of all, don't panic. The bank will usually inform you of the reason for the freeze and ask you to provide additional supporting documents. At this point, you can follow the steps below:
Contact your bank's customer service: Confirm the reason for the freeze with your bank. Banks usually ask for proof of transactions, such as transaction records, details of cryptocurrency transfers, etc. You should have all the relevant documents ready to prove the legitimacy of the source of funds. At this point, you should have all the relevant transaction documents ready to prove that the source of funds is legitimate.
Provide legal proof: If your trading funds come from legal channels, you can provide the exchange transfer records, the corresponding address of receipt and payment, etc. to prove that your funds do not come from illegal channels. If you are trading off-market, you need to provide the agreement with the counterparty or communication records.
Complain or provide counter-evidence: If you believe the freeze was due to a miscarriage of justice, you can file a complaint with the bank and ask for a re-examination. If the bank believes the freeze is unreasonable, it will usually lift the freeze.
How can I avoid my bank card being frozen?
To avoid having your bank card frozen, here are a few strategies that can help cryptocurrency traders reduce their risk:
1. Choose a reliable trading platform or counterparty
Choose an OTC counterparty with a good reputation and credibility, and try to avoid trading with accounts from unknown sources. Certain cryptocurrency exchanges offer funds monitoring services for OTC trading, and choosing such platforms can be a good way to minimize risk.
2. Pay attention to the source of funding
When conducting over-the-counter (OTC) transactions, ensure that the source and destination of funds are legitimate. If you are carrying out large transactions, it is advisable to report to your bank in advance, informing it of the source and purpose of the funds, so as to avoid the bank misjudging the transaction as suspicious.
3. Use of Cryptocurrency Dedicated Banks
Some banks specialize in providing services to cryptocurrency traders, and these banks are more familiar with the flow of cryptocurrency transactions and are less prone to miscalculation. Choosing these banks can effectively minimize risk.
4. comply with local laws and regulations
The legal status of cryptocurrencies varies globally. Stay aware of local laws and anti-money laundering regulations and ensure that all your transactions follow local legal requirements.
Addressing the Legal Risks of Off-Market Transactions in Black Money
If your bank card is involved in money laundering as a result of over-the-counter (OTC) transactions, you may be at risk of legal action. In Taiwan, under the Money Laundering Prevention and Control Act, transactions involving money laundering may constitute a crime and be subject to the appropriate legal sanctions. At this point, it's not just a matter of the bank freezing your card; you may have to face an investigation by the judiciary.
If you find that your transactions have been affected by suspicious funds, you should contact a professional legal advisor in time and follow the legal channels. Try to avoid any kind of transaction with suspicious counterparties and keep clear transaction records and evidence.
Conclusion
Bitcoin over-the-counter (OTC) trading brings lower fees and greater trading flexibility, but it also comes with hidden dangers from dark money and legal risks. To protect your money, investors should choose reliable counterparties, keep clear transaction records, and comply with local laws and regulations. When faced with a frozen bank card, remain calm and take the initiative to contact the bank to provide the necessary supporting information, which can effectively lift the freeze. Regularly reviewing your trading risks and choosing legitimate and regulated trading platforms can also minimize the risk of encountering black money transactions.
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