Private FX Swap in a WeChat Group: USD Paid, the RMB Was Fraud Money, Your Card Frozen — What Now?

The short answer

• Swapping currency with strangers in a WeChat or Telegram group: you send US dollars or euros abroad, and the other side has a domestic personal account send you renminbi. If that renminbi came from a victim of telecom fraud, your card will be treated as a first-tier card in the case (一级涉案卡) and frozen. A freeze requires no prior notice to you and no proof of fault on your part.
• A freeze is an investigative measure, not a penalty. Article 144 of the Criminal Procedure Law of the PRC provides that case-handling authorities may inquire into and freeze a criminal suspect’s deposits and remittances; Article 145 provides that where investigation establishes that the funds are indeed unrelated to the case, the freeze shall be lifted within three days. But “establishing” that takes time, and in practice it is often counted in months.
• Private currency exchange is itself unlawful: under Article 45 of the Regulations on Foreign Exchange Administration, buying or selling foreign exchange privately, or in disguised form, draws a warning, confiscation of the illegal gains and a fine of up to 30 per cent of the amount involved; where the circumstances are serious, a fine of up to the equivalent of that amount.
• Where the amount reaches RMB 5 million or more in illegal business turnover, or illegal gains of RMB 100,000 or more, the conduct moves from administrative unlawfulness to the crime of illegal business operation (Article 225(4) of the Criminal Law of the PRC; Article 3 of Judicial Interpretation No. 1 of 2019, 法释〔2019〕1号). Using virtual currency as the medium to help others match orders between the two currencies (对敲) likewise counts as disguised foreign-exchange trading.
• Lending your bank card to someone else to receive and pay exchange funds, with settlement of RMB 200,000 or more, may constitute aiding information network criminal activities, even if you genuinely did not know that the other side was exchanging currency.
• There is only one proper route to unfreezing: find the authority that froze the card and produce evidence that “I really did pay the foreign currency”. Paying for connections, or routing the money through another account, usually costs you the second card as well.

1. How the money becomes “funds involved in a case”

The chain in this kind of exchange usually has three links: abroad, someone urgently needs renminbi (for family at home, to repay a debt, to buy a flat); in China, someone urgently needs US dollars. The two meet in a group and agree on a rate a few fen better than the bank’s quoted rate. You transfer the dollars to the overseas account the other side designates; the other side has some domestic account send you the renminbi.

The problem lies in that “some domestic account” — it is often not the person you were chatting with. It may be a transit account of an underground bank, or a collection account controlled by a fraud gang. As soon as a victim reports the case, the police follow the money trail backwards, and the account that received the money at the first layer is a first-tier card in the case — and your card happens to be one of them.

So in your books this was a currency exchange; in the case-handling authority’s books it was the first hop of fraud money. The two sets of books do not match, and the card is frozen first.

2. Why a “first-tier card” is hard to unfreeze

A first-tier card means the victim’s money went straight into your account, with no other link in between to buffer it. The case-handling authority’s first reaction can only be: this card may itself be a collection tool. What you actually have to prove is two things — that the money was not obtained by my fraud; and that I gave value for it, that the dollars really were paid out.

The difficulty is the second point. The side paying the foreign currency is often abroad, or the payment ran through virtual currency, so the flows never enter the domestic banking system; the evidence has to be assembled by you — chat records, overseas account statements, withdrawal records from an exchange. With incomplete materials, the case-handling unit has no reason to believe this was not a staged “sham exchange”.

The freeze period is generally six months under the rules, and can be extended when it expires; waiting for it to lift itself is, in practice, waiting forever.

3. The order of steps after a freeze

• First establish who froze it. Ask your account bank’s customer service or branch for “the name and contact telephone number of the freezing authority” — the bank is obliged to tell you the freezing unit. Once you have the unit, contact the case-handling officer directly; do not just go back and forth with your bank — the bank has no power to unfreeze.
• Bring all the materials in one go: the complete chat records of the exchange (with timestamps, not just the few lines that suit you), proof that you paid the foreign currency (overseas bank statements, exchange withdrawal records, remittance receipts), the record of the renminbi the other side paid you, identity documents, and a written statement setting out the timeline.
• Ask for a written notification: the freezing authority, the cause of the case, the freeze period. You will need this document later to apply for unfreezing, to petition, or to instruct a lawyer.
• Use one channel only. You may apply in writing to have funds unrelated to the case released from the freeze; whether to agree is for the case-handling authority to decide. At the same time, state clearly that you will cooperate with the investigation and will not move the funds.
• If you disagree with the handling, use the statutory petition route. Article 32(3) of the Anti-Telecom and Online Fraud Law requires that where restrictive or suspensive measures are taken against an abnormal situation connected with fraud, the authority shall inform the person of the reason for the measure, the channels for relief and the materials to be submitted; the person affected may file a petition, and where verification is passed the measure shall be lifted immediately.

4. Administrative and criminal liability for currency exchange

At the administrative level, see Article 45 of the Regulations on Foreign Exchange Administration (quoted in part): “Where a person buys or sells foreign exchange privately, trades foreign exchange in disguised form, buys and sells foreign exchange for profit, or illegally introduces others to buy or sell foreign exchange, in a relatively large amount, the foreign exchange administration authority shall issue a warning, confiscate the illegal gains and impose a fine of up to 30 per cent of the amount involved; where the circumstances are serious, a fine of 30 per cent or more of the amount involved but not more than its equivalent; where a crime is constituted, criminal liability shall be pursued in accordance with law.”

At the criminal level, the basis is Article 4 of the NPC Standing Committee’s Decision on Punishing the Crimes of Fraudulently Purchasing Foreign Exchange, Evading Foreign Exchange and Illegally Trading Foreign Exchange, together with Article 2 of Judicial Interpretation No. 1 of 2019 (法释〔2019〕1号): buying and selling foreign exchange for profit, or trading foreign exchange in disguised form, outside the trading venues prescribed by the State, thereby disrupting the order of the financial market, where the circumstances are serious, is convicted as the crime of illegal business operation under Article 225(4) of the Criminal Law of the PRC. The thresholds are set out in Article 3: illegal business turnover of RMB 5 million or more, or illegal gains of RMB 100,000 or more; “especially serious circumstances” means RMB 25 million or more, or illegal gains of RMB 500,000 or more.

The Supreme People’s Court Case Database contains three decided cases that distinguish very clearly the three roles in this chain:

• Database entry no. 2025-03-1-169-003 (Songjiang District People’s Court, Shanghai, first instance): one side collected renminbi in China while the other paid US dollars from a controlled overseas company account, at a rate 0.02 above the Bank of China quoted rate, totalling over RMB 40 million. The judgment noted specifically that a profit motive is not the same as actual profit, and that a book loss on individual transactions does not affect conviction; the principal offender was sentenced to five years and nine months.
• Database entry no. 2025-03-1-169-002 (Jianhu County People’s Court, Jiangsu, first instance): using a “naira — Tether — renminbi” conversion chain to help overseas clients bypass foreign exchange supervision and convert into renminbi, in an amount of over RMB 20 million, convicted of the crime of illegal business operation. The holding states expressly that a person who knows another is illegally trading foreign exchange and assists in converting virtual currency bought with foreign currency into renminbi, effecting the currency conversion, is engaged in illegal foreign exchange trading.
• Database entry no. 2025-03-1-169-001 (Shanghai No. 2 Intermediate People’s Court, second instance): setting up an illegal currency exchange website and using Tether as the medium to help people exchange currency is handled as a joint offender in the crime of illegal business operation; whereas merely lending one’s own bank account to receive and pay money, with a general awareness that “the other side is committing a crime” but without knowing that it was specifically currency exchange, is convicted of aiding information network criminal activities.

These three roles correspond to three offences: the organiser of the exchange, the conversion intermediary, and the person who lends an account for the money to pass through. As for the person who exchanges once for his own use, charges no fee and does not do it repeatedly, most such cases fall into the administrative category — provided there is no profit motive and no passing of money for others. And once virtual currency such as Tether enters the chain, there is a further layer to examine; see also What can the eight-department notice on virtual currency actually convict you of?

5. Will the money in the card be transferred away?

Dealing with property involved in a case follows a procedure: the public security organ must establish the source, nature and ownership, and transfer it with the case; the procuratorate reviews it and gives its opinion on disposal; the court disposes of it in the judgment (Article 15 of the Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Several Issues Concerning the Application of Law in Handling Cross-Border Telecom and Online Fraud and Other Criminal Cases). For lawful property belonging to victims, prompt return is the principle.

The risk lies in how you are classified. Once you are found to stand on the side of “helping to transfer funds”, the money is recovered, while the foreign currency you already paid out cannot be recovered — you lose at both ends. So do not count on the hope that “the police will not debit it directly”: in the consultation mentioned in the video commentary, five months after the card was frozen, several hundred thousand yuan was transferred out.

6. The lawful route that does not freeze your card

The annual facilitation quota of USD 50,000 per person is the least troublesome route: no need to explain the purpose to the bank, and it can be done on mobile banking with an ID card. If that is not enough, a spouse, parents or children can each transact within their own quota — but the purpose and the payee must be genuine, and quotas may not be held on another’s behalf or pooled for someone else to use. For large genuine needs such as study abroad, medical treatment or emigration, apply at the bank with the admission letter, medical records or visa materials. Enterprises go through normal receipts and payments under goods trade and services trade.

In one sentence: you are after a spread of one or two fen on the rate; the other side is after your principal and your bank card.

7. Limits that need to be stated

Local standards for what counts as a “good-faith exchange” vary widely. Whether a card can be unfrozen, and how long that takes, depends on how complete the evidence is and on the case-handling unit; there is no nationally uniform standard. The “three to six months” and “transferred out after five months” in this article come from practice observations in the video commentary, not from time limits in any regulatory document. The case material is taken from the entry numbers and holdings published in the Supreme People’s Court Case Database; the facts are summarised paraphrase, and application in any case still requires the original judgment and the evidence in that case.

If you or a family member are facing a frozen bank card, a currency exchange that has turned criminal, or recovery of funds connected with fraud, you are welcome to contact Lawyer Wang: telephone 186-0113-9509, WeChat wang223040.

This is an English edition of Wang Xin’s original Chinese article, 微信群里换外汇，美元付了、人民币却是骗子的钱：卡被冻结后该怎么办？. It explains the law of the People’s Republic of China in general terms and is not legal advice for any particular case; outcomes depend on the specific facts and on how local authorities apply the rules.