Written by: Liu Zhengyao

Introduction

When you complete a regular coin purchase transaction in a Telegram group or on some niche virtual currency trading platform, receive USDT sent by the other party, and then cash it out——this seemingly ordinary operation could potentially drag you into a criminal case without your knowledge, which could result in minor cooperation with investigations or serious imprisonment.

The "Clean" and "Unclean" USDT

USDT (Tether) is one of the largest stablecoins in circulation worldwide, widely used for virtual currency transactions due to its price pegged to the US dollar, fast transfer speeds, and traceable on-chain records. However, this widespread circulation also makes it a "preferred tool" for some criminals for money laundering.

In reality, USDT does not come from equal sources. Some USDT originates from compliant digital asset transactions, while others come directly from illegal gains from upstream criminal activities such as telecom fraud, online gambling, drug trafficking, and illegal fundraising. This "black USDT" leaves a complete flow record on the blockchain, and its source addresses may have been continuously monitored by global law enforcement agencies, including the Chinese police.

The problem is: for ordinary virtual currency sellers, you cannot distinguish whether the USDT transferred to you is "clean" just by looking at it or with a beginner's understanding of blockchain. The trading interface only shows a string of addresses and numbers, and you know nothing of the origin of these coins.

What is the Crime of Concealing Criminal Gains (Concealment Crime)

According to China's Criminal Law, if a person knows that the property involved is criminal gains and conceals, transfers, acquires, sells on behalf of others, or takes other methods to conceal or hide it, they shall be sentenced to less than three years of fixed-term imprisonment, criminal detention, or control, and may also be fined; if the circumstances are serious, they shall be sentenced to fixed-term imprisonment of three to seven years and fined.

The core elements of the concealment crime are two: first, the actor subjectively "knows" that the property involved is criminal gains; second, objectively, they have engaged in acts to conceal or hide.

How "Innocent Participants" Get Involved

In reality, cases often unfold as follows: Fraud, pyramid schemes, or gambling platforms convert illegal gains into USDT, then dilute the funds through multiple "hops" and finally transfer this USDT to a "normal" over-the-counter trading platform, selling to unsuspecting ordinary users at market price (or even noticeably below market price).

This ordinary user——let's call him "Zhang San"——is merely placing a normal buy order on the platform, receiving USDT from the other party, and selling it for cash according to usual practice. Throughout this process, Zhang San neither knows the upstream criminals nor obtains any "money laundering rewards," and is completely innocent subjectively.

However, Zhang San's operation objectively completes the final link in laundering criminal funds: transforming illegal USDT into legal RMB. In legal terms, his conduct objectively constitutes "using other methods to conceal or hide criminal gains."

When the police trace the funds and find Zhang San, the case enters a dangerous phase.

The "Coercive Confession" Risk During Interrogation

In criminal cases, "knowledge" is the key subjective element for conviction. In the absence of direct evidence proving that the person is aware, judicial practice often relies on presuming knowledge——the conviction logic of "should have known."

This is extremely dangerous for ordinary traders like Zhang San who are under investigation. Once they enter the inquiry stage, parties unfamiliar with legal procedures may easily leave statements in their confessions influenced by mental fatigue, verbal guidance, emotional pressure, etc., such as "I probably know this kind of transaction has risks," or "I've heard of people using USDT for money laundering."

Such seemingly casual remarks may be interpreted as evidence of subjective "knowledge," thus transforming the person from an "innocent trader" into a "suspect of concealment." This situation is not an isolated case in real-world examples.

The "Presumed Knowledge" Standard in Judicial Practice

In 2021, the two higher courts issued "Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Telecom and Network Fraud (II)," clearly stating that when determining "knowledge," all evidence of the case can be comprehensively reviewed, including: transaction frequency, profit situation, fund flow, the actor's cognitive ability, and transaction background.

In practice, if a party frequently engages in large USDT transactions, concludes trades at rates significantly different from market prices, and quickly disperses funds after receiving them, they may be deemed to have "subjective intent."

The Legal Dilemma of Objective Assistance and Subjective Innocence

From the perspective of criminal law theory, the establishment of the concealment crime requires the actor to have "knowledge" as a subjective intent. However, in judicial practice, the standard for determining "knowledge" is quite broad and tends to extend to "should know" to some extent.

This creates a dilemma: the decentralized nature of virtual currency transactions means that the parties naturally lack a foundation of trust, and you can never trace the source of the other party's funds as clearly as one could with bank statements. When you complete a legitimate transaction, only to later find out you inadvertent moved criminal funds, the tension between your "objective assistance conduct" and "subjective innocence" will become the core controversy of the entire case.

Moreover, in the absence of professional legal defense, it is often difficult for parties to effectively restore and prove their innocence. Especially after long periods of questioning, chaotic statements may provide grounds for judicial authorities' assumptions of guilt.

Some Suggestions from Lawyer Liu

As a lawyer who has long focused on the criminal legal risks of virtual currencies, Lawyer Liu hopes to convey the following practical suggestions to all friends participating in virtual currency transactions through this article:

First, be cautious with large USDT transfers from strangers. For transfers from unknown sources without a transaction background, especially those that are obviously overpriced and come with requests for rapid fund circulation, be highly alert, and refuse if necessary.

Second, do not privately accept USDT outside mainstream trading platforms. Private over-the-counter trading lacks regulatory protection; if something goes wrong, you have neither platform transaction records for support nor compliance basis for defense. According to mainland China's regulatory policies, we are not allowed to trade or speculate in virtual currencies. However, if it is absolutely necessary to trade, it should be done on mainstream exchanges like Binance, Huobi, etc. (Reminder: conducting virtual currency transactions in mainland China is at your own risk; Lawyer Liu does not recommend or encourage cryptocurrency speculation).

Third, retain complete transaction records. Whether it is chat screenshots, platform orders, or on-chain transfer records, all should be properly preserved. This is key evidence for proving your innocence later.

Fourth, once under investigation, immediately retain a lawyer. Be sure to consult a professional Web3 criminal lawyer before facing inquiries, and be cautious in answering during investigations or interrogations, especially avoiding making statements without fully understanding the meaning of the questions.

Fifth, rigorously assess your trading behavior. The speculation of virtual currencies itself is already in a grey area under China's legal framework, and when combined with money laundering risks, its legal consequences should not be underestimated. Please make prudent decisions with a full understanding of the legal risks.

Conclusion

The world of virtual currencies is not as free as it seems. The anonymity of blockchain is a double-edged sword——it protects users' privacy but also provides cover for the flow of criminal funds, and ultimately, it is often the unsuspecting ordinary traders who "clean up" this money laundering loop.

The law will not automatically exempt you from responsibility because of your ignorance; judicial authorities will not abandon prosecution simply because you say "I didn't know." The dilemma faced by "innocent participants" lies in the fact that your good intentions cannot prevent you from being drawn into someone else’s crime.

Lawyer Liu earnestly advises: In the current context of tightening regulation and increasing enforcement intensity, every friend participating in virtual currency transactions should carefully assess their legal risks, stay away from funds of unknown origin, and proceed with caution. A moment's lapse in judgment could cost you years of freedom.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。