What should a Web3 company do if it faces enforcement action in a different location or its accounts are frozen? Practical solutions from a criminal lawyer's perspective.

Is it legal for a company's accounts to be frozen by a police station in another province? Is it illegal for a company to be investigated across provinces?

Author: Lawyer Shao Shiwei

Is it legal for a company's accounts to be frozen by a police station in another province? Is it illegal for a company to be investigated across provinces? If a company and its family encounter so-called "deep-sea fishing" or profit-driven enforcement, how should they respond? These are the real-world questions that Attorney Shao's team has been repeatedly asked in their daily case handling and consultations.

For entrepreneurs, the biggest worry is often not the fluctuations in profits and losses during normal business operations, but rather the unexpected criminal investigation: the company is reported to the police in another province, bank accounts are frozen by authorities in another region, and the company's负责人 (responsible person) is taken away by public security officers from another region to assist in the investigation, with the alleged charges being vague, followed by the seizure, detention, and freezing of huge amounts of assets...

In these cases, some have been specifically identified by the Supreme People's Procuratorate and the Supreme People's Court as requiring focused rectification of violations of cross-regional law enforcement and profit-driven law enforcement . On February 5, 2026, the Supreme People's Procuratorate issued a notice reiterating corrective measures for profit-driven law enforcement cases.

Moreover, data released by the Supreme People's Procuratorate shows that by the end of 2025, procuratorial organs nationwide had handled more than 19,000 cases of profit-driven law enforcement, indicating that the supervision of profit-driven law enforcement has begun to show results. This also reflects that there are already many cases of profit-driven law enforcement in various regions.

Against this backdrop, entrepreneurs need to examine: What kind of law enforcement actions might be suspected of being profit-driven? Is it possible for their own business operations to encounter "deep-sea fishing" or " profit-driven law enforcement " ? If so , how should they respond ?

What is profit-driven law enforcement?

The Supreme People's Procuratorate explicitly pointed out that profit-driven law enforcement refers to illegal acts such as seeking economic benefits and illegally confiscating property under the guise of handling cases. Essentially, it treats power as a means to generate wealth, with the confiscation of property in cases highly tied to local government revenue or departmental performance targets .

In recent years, the state has maintained a high-pressure crackdown on profit-driven law enforcement. On April 26, 2025, the Supreme People's Court issued the "Notice on Upholding Strict and Impartial Judicial Regulations in the Trial and Enforcement of Cases Involving Enterprises," which stated: Resolutely prevent and correct the use of administrative and criminal means to interfere in economic disputes, and effectively prevent problems such as illegal cross-regional law enforcement and profit-driven law enforcement. At the same time, it requires courts to strictly review jurisdiction to prevent illegal cross-regional law enforcement and profit-driven law enforcement from the source.

On January 19, 2026, the National Conference of Presidents of Higher People's Courts was held. The conference proposed that: we must adhere to the boundaries of power and focus on resolving issues such as the use of administrative and criminal means to interfere in economic disputes in practice, especially the problems of profit-driven law enforcement and illegal cross-regional law enforcement.

How can businesses identify profit-driven law enforcement and illegal cross-regional law enforcement?

In practice, profit-driven law enforcement takes many forms, but its core characteristics can be summarized in the following two points.

1. Arbitrarily expanding jurisdiction: illegally enforcing the law in other places to carry out cross-provincial arrests, arbitrarily seizing, freezing, and even confiscating the property of enterprises and individuals in other places.
   This refers to situations where law enforcement agencies do not exercise jurisdiction based on the suspect's place of residence, but instead forcibly link jurisdiction through clues provided by the investigation company and designated jurisdiction, thereby dominating the investigation and gaining control over the disposal of the seized assets.

• Taking the case of "being detained by police in both Hunan and Henan provinces for possessing a large amount of Bitcoin" as an example, Li, an IT professional in Shenzhen, was involved in investigations in both provinces. He was first summoned in Hunan on suspicion of operating a casino, and police seized 103 Bitcoins from his digital wallet. With Li's cooperation, he converted the Bitcoins into over 49.61 million RMB, after which he was released on bail. Just a few days later, Li was taken away for investigation by police in Henan, where the charges were changed to infringing on citizens' personal information.
  From a practical perspective, such situations of "multiple locations vying to file cases and continuously changing the direction of charges" are often important signals for identifying whether there is illegal cross-regional law enforcement or jurisdictional expansion, and enterprises and individuals should remain highly vigilant.
• The second typical case released by the Supreme People's Procuratorate in 2026, "Supervision Case of a Company's Funds Frozen in Another Region," also indicates the existence of illegal cross-regional law enforcement. A cross-regional investigative agency froze 17 accounts of a company in another region at once, totaling over 80 million yuan, on the grounds of issuing false value-added tax invoices. This was later determined to lack a legitimate jurisdictional basis, constitute illegal cross-regional law enforcement, and involve excessive freezing.

1. Improper intervention in economic disputes through criminal means: These are essentially contract disputes or investment disputes, but instead of civil and administrative channels, criminal proceedings are initiated directly.
   This is another typical case where civil and commercial disputes that originally fall under the category of contract performance or investment risk are criminalized. This objectively increases the possibility that some law enforcement agencies may intervene in economic disputes through criminal means, thereby confiscating huge amounts of illegal gains and fines.

• Taking the "Liang Liang case in Wuxi, involving the organization and leadership of a pyramid scheme" as an example, the case initially occurred in 2021. Wuxi police searched for leads online and initiated an investigation for illegal use of information networks. The charges were changed several times, and finally, in March 2023, the prosecution changed the charge to organizing and leading a pyramid scheme. In December 2023, the Xishan District People's Court sentenced Liang Liang to ten years in prison and a fine of 20 million yuan because he refused to plead guilty. All assets belonging to users of the platform were confiscated. For details of the case, please refer to Attorney Shao's previous article (➡️ " A Brief Discussion on Profit-Driven Law Enforcement in Criminal Cases Involving Crypto Circumstances ").
  Such case paths, which begin with online administrative leads and subsequently involve adjustments to the charges, are prone to sparking controversy in practice regarding "using criminal means to intervene in the boundaries of economic activities," and deserve close attention from relevant practitioners.
• Taking the case of "A Private Lending Case Wrongly Identified as Loan Fraud" released by the Supreme People's Procuratorate in 2026 as an example, a real estate developer took out a loan from a bank. Even though both parties had reached a repayment agreement in civil court regarding the overdue payment, local authorities still initiated an investigation against the borrower for suspected loan fraud and seized more than 280 properties in the project. These assets, valued at 110 million yuan, significantly exceeded the original loan principal of over 89 million yuan. Ultimately, the procuratorate issued a supervisory opinion in accordance with the law, determining that it was inappropriate to classify it as a crime, and the case was dismissed.
  This case also reflects that, in handling disputes involving enterprises, improper handling of the boundary between criminal and civil law can indeed have a significant impact on the stability of enterprise assets and operations.

Which Web3 and crypto businesses are most vulnerable to cross-regional law enforcement?

Based on Attorney Shao's practical experience and the cases he has handled in recent years involving virtual currencies and Web3 businesses, the aforementioned risk characteristics exhibit certain commonalities among the companies investigated. When a crypto business simultaneously possesses the following characteristics—highly concentrated funds, users distributed across regions with some concentrated in underdeveloped areas, operating in a gray area, and significant information asymmetry—it is often more likely to enter a high-risk area for criminal activity. In practice, law enforcement agencies typically use policy documents such as the September 4th Announcement, the September 24th Notice, and the latest February 6th Notice (2026) as the basis for enforcement.

Once identified as having characteristics of illegal business operations or gambling, it is easy to attract the attention of certain local authorities, who may initiate investigations and seize assets in a different location using methods similar to those used in deep-sea fishing. High-risk businesses can be mainly divided into the following three categories:

First, centralized or quasi-centralized exchanges are the most high-risk sector. These platforms often hold massive amounts of user funds and virtual assets, with users distributed across the country and even globally. If any local authority claims to have players in their area, they have a reason to claim jurisdiction. Relevant authorities who are not familiar with this type of business are often prone to classifying the perpetual contract sector as a gambling game using virtual currencies as chips.

Second, Web3 applications with a clear element of gambling, such as blockchain games, NFT blind boxes, and quiz-based DApps. In judicial practice, any gameplay involving "high stakes and large wins, with the outcome largely determined by chance" is easily considered gambling. If the investigating authorities choose to classify it as operating a gambling den, the entire platform's revenue could be simply and crudely included in the gambling funds. Moreover, the nationwide distribution of users of these applications provides a ready-made justification for deep-sea fishing.

Third, Web3 project developers, digital wallet service providers, and technical intermediaries offering payment gateways, fiat currency exchange channels, and clearing and settlement services are often targeted incidentally under the magnifying glass of profit-driven law enforcement. Many downstream service providers are unaware of whether upstream platforms are actually violating the law, but wallet custody accounts, wallet balances, and settlement reserves all have extremely high seizure value.

What to do when your company account is frozen in another location and your boss is taken away?

This article specifically reminds the following entities to pay close attention to the relevant risks: Web3 project teams and technical teams, business owners operating across regions, and businesses and their families who have experienced or are worried about their accounts being frozen in other locations.

For these groups, the real challenge often lies not in whether they will receive attention, but in how, after being investigated, seized, or even taken away for questioning by authorities in other regions, they can steer the case back onto a path more favorable to themselves within the existing institutional framework.

Given that the state has already identified illegal cross-regional law enforcement and profit-driven law enforcement as targets for rectification, and has established a special supervision zone on the 12309 China Procuratorate website, it is recommended that parties involved in criminal cases and their families take the following measures at different stages to turn a passive situation into an active one:

• Beforehand : Take immediate steps to mitigate losses and stabilize the situation once the investigation has begun. This involves two main steps: firstly, verifying legal procedures, such as confirming the identities of investigators; and secondly, closely monitoring asset transactions and preserving evidence of communication to facilitate future oversight.
  
• During the process : If a family member is taken away by the police or a company account is frozen in another location, the family can hire a lawyer to compile written materials detailing the issues that arose in the case (such as illegal seizure or improper jurisdiction) and submit them through the special supervision section on the Supreme People's Procuratorate's 12309 website. They should report the case to a higher-level procuratorate, requesting the supervisory department to re-examine the case from the perspective of "whether there was any illegal enforcement in another location or enforcement driven by self-interest," striving to push for the case to be withdrawn, not prosecuted, or at least have the scope of charges narrowed from the outset.
• Afterwards : Once the investigating unit has made a preliminary determination on a certain charge against the company, the focus should shift from stopping the loss to mitigating it. Different cases require different approaches, and it is recommended to consult a professional lawyer. Based on the existing materials, the lawyer will negotiate and communicate with the case handlers regarding core issues such as the elements of the charge, the subjective malice, and the substance of the business transaction.

The public statements from the Supreme People's Court and the Supreme People's Procuratorate demonstrate that the state is sending a clear signal of its continued commitment to rectifying law enforcement irregularities such as "arrests across provinces without jurisdiction," "illegally freezing accounts," and "profit-driven law enforcement."

However, law enforcement practices vary across regions. For ordinary families, encountering profit-driven enforcement, with family members taken away and accounts frozen, neither passive cooperation nor blind resistance can resolve the predicament. A more pragmatic option is to seek the help of a professional lawyer, leveraging the existing institutional framework to identify procedural violations in specific cases, raise objections according to law, and push the case into the supervisory process, bringing it back to the rule of law as much as possible.

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