Author: Shao Shihui Lawyer Team

Is it legal for a company to have its accounts frozen by law enforcement in another region? Does a cross-provincial case against a business constitute illegal enforcement? If faced with so-called "ocean fishing" or profit-driven enforcement, how should businesses and their families respond? These are the practical questions that the Shao Lawyer Team is frequently asked in daily case handling and consultations.

For entrepreneurs, the biggest worry is often not the fluctuations in profits and losses during normal operations but rather the sudden onset of criminal cases: the company is reported in another province, bank accounts are frozen by agencies from a different region, and corporate executives are taken away by local police for assistance in investigations, with vague allegations, followed by massive asset seizures, confiscations, and freezes...

In such scenarios, some cases have been specifically identified by the Supreme People's Procuratorate and the Supreme People's Court as requiring focused rectification of illegal enforcement in different locations and profit-driven enforcement. On February 5, 2026, the Supreme People's Procuratorate reiterated corrective measures for profit-driven enforcement cases.

Moreover, data released by the Supreme People's Procuratorate indicates that by the end of 2025, procuratorial organs nationwide had handled more than 19,000 related profit-driven enforcement cases, showing initial effectiveness of supervision over profit-driven enforcement, reflecting that many such cases already exist in various regions.

In this context, it is necessary for entrepreneurs to examine: What kind of enforcement actions might involve profit-driven motives?Could their own business operations encounter "ocean fishing" or "profit-driven enforcement"? If encountered, what should one do?

1. What is profit-driven enforcement?

The Supreme People's Procuratorate clearly states that profit-driven enforcement refers to illegal acts aimed at acquiring economic benefits by claiming the guise of case handling, such as improper confiscation of property. Essentially, it involves using power as a means to generate economic profits, with fines and confiscations heavily tied to local financial or departmental interests.

In recent years, the state has maintained a high-pressure rectification stance against profit-driven enforcement. On April 26, 2025, the Supreme People's Court issued a notice on adhering to strict and fair judicial norms in cases involving businesses, emphasizing the need to prevent and rectify the use of administrative and criminal means to intervene in economic disputes, effectively preventing illegal enforcement across regions and profit-driven enforcement issues. Additionally, courts are required to strictly examine jurisdiction to prevent such issues from the source.

On January 19, 2026, a meeting of heads of national high courts convened, stressing the need to adhere to boundaries of power and address issues of intervening in economic disputes using administrative and criminal means, especially concerning profit-driven enforcement and illegal enforcement across regions.

2. How can businesses identify profit-driven enforcement and illegal enforcement across regions?

In practice, the manifestations of profit-driven enforcement are diverse, and the core characteristics can be summarized into the following two points.

1. Arbitrary expansion of jurisdiction: Using illegal enforcement in different locations to carry out cross-provincial arrests, indiscriminately sealing or freezing assets, even seizing properties of businesses and individuals from other areas.

   This refers to situations where the authorities do not exercise jurisdiction based on the suspect's place of residence but forcibly connect jurisdiction through means such as providing leads from investigative agencies, thus leading investigations and controlling the disposal of property involved in the case.

• An example is "the same case is reported in Hunan and Henan due to involving a huge asset," where an IT worker named Li, holding a large amount of Bitcoin, became involved in two investigations in both locations. He was first summoned in Hunan for allegedly establishing a gambling operation, and police seized 103 Bitcoins from his digital wallet. With Li's cooperation, the Bitcoins were converted into over 49.61 million yuan. The authorities then released him on bail. Just a few days later, he was taken away by police from Henan, facing allegations of violating citizens' personal information.

  From practical observations, such occurrences of "multiple jurisdictions competing for cases and continuously changing charges" often serve as important signals to identify whether illegal enforcement or jurisdictional expansion exists, and businesses and individuals should remain highly vigilant.

• A notable case released by the Supreme People's Procuratorate in 2026, "Supervision Case of Funds Frozen by Different Regions," also indicates the existence of illegal enforcement across regions. Investigative agencies from other areas froze 17 accounts of an enterprise under the justification of falsely issuing VAT invoices, with a total frozen amount exceeding 80 million yuan, later determined to lack viable legal jurisdiction and categorized as illegal enforcement and excessive freezing.

2. Improper intervention in economic disputes using criminal means: Essentially, it's a contractual dispute or investment dispute but bypasses civil or administrative routes to initiate criminal proceedings directly.

   This is another typical scenario involving the criminalization of civil and commercial disputes originally related to contract performance or investment risks, objectively increasing the likelihood that certain investigative authorities will intervene in economic disputes through criminal means, thereby allowing them to confiscate large sums of illegal proceeds and fines.

• Taking the "Wuxi Liang Liang Organization and Leadership of Pyramid Scheme Case" as an example, the case first emerged in 2021, where Wuxi police sought investigative leads online, initiating investigations for illegally utilizing information networks. During this time, the charges were repeatedly altered, and ultimately, in March 2023, the prosecution changed the charges to organizing and leading pyramid scheme activities. In December 2023, the Xishan District People's Court convicted Liang Liang, imposing a ten-year sentence and a fine of 20 million, along with the total confiscation of platform user assets. For specific details about the case, refer to Shao Lawyer's previous articles (➡️ "Discussion on Profit-driven Enforcement Phenomenon in Criminal Cases Related to the Cryptocurrency Sector").

  This type of case, starting from online administrative leads and subsequently adjusting the charges, easily leads to controversies regarding "intervention in the boundaries of economic activities using criminal means," which should be closely monitored by related practitioners.

• The third typical case released by the Supreme People's Procuratorate in 2026, "Private Lending Misidentified as Loan Fraud Case," exemplifies this situation. A real estate developer borrowed from a bank, and despite both parties reaching a repayment agreement in civil court regarding overdue issues, local authorities still initiated investigations against the lender for suspected loan fraud, taking protective measures on over 280 properties in the project, which had an estimated value of 110 million yuan, significantly exceeding the original loan principal of over 89 million yuan. Ultimately, the procuratorial authority made a supervisory opinion deeming it inappropriate for criminal classification, leading to the case being withdrawn.

  This case also indirectly reflects that improper distinctions between criminal and civil matters in handling enterprise disputes could significantly impact corporate assets and operational stability.

3. Which Web3 and cryptocurrency businesses are most likely to be subjected to enforcement in different regions?

From Shao Lawyer's practical experience, combined with recent handling of multiple criminal cases involving virtual currencies and Web3 businesses, the aforementioned risk characteristics exhibit certain commonalities among the enterprises being investigated. When a cryptocurrency business possesses the following characteristics—highly concentrated funds, user distribution across regions with some in underdeveloped areas, operations in gray areas, and significantly asymmetric technical information—it is often more likely to enter high-risk criminal zones. In practice, handling authorities typically rely on policy documents such as the 9.4 announcement, 9.24 notice, and the latest 2.6 notice from 2026 as enforcement guidelines.

Once identified as having illegal operations, gambling, etc., it can easily attract attention from certain local agencies, leading to "ocean fishing" style enforcement actions, asset seizures in different locations. High-risk businesses can primarily be categorized into the following three types:

• First, centralized or semi-centralized exchanges are the most high-risk sector. Such platforms often hold vast amounts of user funds and virtual assets, with users distributed nationwide or even globally. If any local agency claims that local players are involved, it creates a basis for asserting jurisdiction. Authorities unfamiliar with this type of business often misconstrue perpetual contracts as gambling games using virtual currencies as stakes.
• Second, Web3 applications with obvious elements of chance, such as blockchain games, NFT blind boxes, and betting-type DApps. In judicial practice, as long as the gameplay involves "small bets with large outcomes, primarily determined by chance," it is easily classified as gambling. Once investigative agencies choose to categorize it under the crime of establishing a gambling operation, the entire transaction volume of the platform could be crudely classified as gambling funds. Moreover, these applications have users distributed nationwide, providing ready reasons for "ocean fishing."
• Third, Web3 project teams, digital wallet service providers, and technical intermediaries providing payment gateways, fiat currency exchange channels, and settlement services often become collateral targets under the magnifying glass of profit-driven enforcement. Many downstream service providers may not be aware if upstream platforms are indeed violating laws, but wallet custodial accounts, wallet balances, and settlement reserves have high seizure values.

4. Steps to take when corporate accounts are frozen by law enforcement from another region, and the owner is taken away

This article particularly reminds the following groups to pay attention to related risks: Web3 project teams and technical staff, leaders of enterprises operating across regions, as well as businesses and families that have experienced or are concerned about accounts being frozen by law enforcement from other areas.

For these groups, the real difficulty often lies not in whether they will be scrutinized, but in how to navigate the existing institutional framework to steer the case back toward a more favorable course after being subjected to jurisdiction, asset seizures or even having individuals taken away for investigation.

With the state explicitly naming illegal enforcement across regions and profit-driven enforcement as targets for rectification and establishing specialized supervisory sections on the 12309 China Procuratorate website, parties and their families involved in criminal cases are advised to adopt the following measures at different stages to turn passivity into proactivity:

• Before the incident: When an investigation is already underway, urgently mitigate losses and stabilize the situation. On one hand, verify procedures legally, such as checking the identity of the case handlers. On the other hand, focus on the asset aspects and promptly retain communication evidence for later supervisory actions.

• During the incident: If family members are taken away by police or company accounts are frozen by law enforcement from another area, relatives can hire a lawyer to compile written materials addressing issues appearing in the case (such as illegal seizures, improper jurisdiction, etc.), and submit them through the special supervisory section on the Supreme Procuratorate's 12309 website. They can report the case situation to higher prosecutorial authorities and request re-examination of the case by the supervisory department concerning whether "illegal enforcement across regions or profit-driven enforcement" exists, aiming to promote dismissal of the case or non-prosecution from the source, or at least narrow down the charge scope.

• After the incident: When the authorities have preliminarily classified the case against the corporation under a specific crime, the focus should shift from mitigating losses to reducing them. Given that responses vary by the specifics of the case, it is advisable to consult a professional lawyer. Based on existing materials, lawyers can negotiate and communicate with the case handlers around core issues such as the elements of the charge, subjective malice, and business substance.

From the public statements of the Supreme People's Court and the Supreme People's Procuratorate, it can be seen that the state continues to send clear signals to rectify issues like "cross-provincial arrests without jurisdiction," "illegal account freezes," and "profit-driven enforcement" irregularities.

However, there are discrepancies in enforcement practices across regions, and for ordinary families, once faced with profit-driven enforcement, with family members taken away and accounts frozen, passive cooperation or blind resistance can hardly resolve the crisis. A more pragmatic choice is to seek the assistance of professional lawyers, leveraging existing institutional space to identify procedural violations in individual cases, lawfully raise objections, and push for the case to enter supervisory procedures, striving to guide the case back into the rule of law.

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