Chinese Police Freezing OTC Traders’ Bank Accounts Over ‘Tainted’ Crypto

[Nostoman]

Thousands of cryptocurrency over-the-counter merchants and their clients may have been affected as police in China freeze bank accounts over crypto and fiat assets tainted by illicit activity.

Caught up in a police probe since last Thursday, some Chinese crypto buyers and sellers and OTC market makers have already had accounts frozen because their transactions may have been contaminated by money laundering activities involving cryptocurrencies.

Sun Xiaoxiao, a former staffer at Chinese crypto wallet startup Bixin who now runs an OTC desk, wrote in a Weibo post on Friday that his bank accounts had been frozen and that it was not an individual case. The action, taken by the police in China’s Guangdong province, potentially impacts “several thousand people,” he said.

The affected crypto users aren’t necessarily accused of any wrongdoing, and the incident raises the wider question of the quantity of cash and crypto assets that has been contaminated by illicit activity. It’s a concern because OTC desks are the only fiat currency on-and off-ramps for China-based crypto users who do not have overseas bank accounts.
More information: https://www.coindesk.com/china-police-freeze-otc-traders-bank-accounts-tainted-crypto