What are the risks of using someone else's bank card to receive payments when buying or selling USDT?

When buying and selling cryptocurrencies such as USDT and Tether, are there any legal risks involved in using relatives' or friends' bank cards for collection and payment on behalf of others? If it involves criminal offenses, what charges might be brought against them, such as illegal business operations, aiding and abetting fraud, concealing wrongdoing, or obstructing credit card management?

Author: Lawyer Shao Shiwei

Cover: Photo by Tingey Injury Law Firm on Unsplash

Original Title: Case Handling Notes | What are the risks of using someone else's bank card to receive payments when buying and selling USDT? — Examining the boundaries of illegal business operations, aiding and abetting, and concealing crimes, and key points for defense, through a case involving billions of dollars in virtual currency.

When buying and selling cryptocurrencies such as USDT and Tether, are there any legal risks associated with using relatives' or friends' bank cards for collection and payment on behalf of others? If it involves criminal activity, could it be grounds for charges such as illegal business operations, aiding and abetting fraud, concealing wrongdoing, or obstructing credit card management? —The background to this question is:

Recently, in a case handled by Attorney Shao involving the trading of USDT (Tether), the client was charged by judicial authorities with the crime of illegal business operations.

After six months of communication with the prosecutor in charge and submitting written legal opinions multiple times, the prosecutor basically agreed with the defense's opinion that, based on the existing chain of evidence, the party concerned may not have been aware that the funds received were exchanged in USDT through an underground bank upstream, and therefore did not constitute the crime of illegal business operations.

However, given the billions of yuan involved in this case, and the fact that the parties involved had used dozens of bank cards belonging to relatives and friends for virtual currency transactions in recent years, from the perspective of the investigators, this operating model certainly does not resemble a "normal" business. Therefore, the prosecutor believes that even if it does not constitute the crime of illegal business operations, they are still considering charging the parties involved with other crimes, such as obstructing credit card management, aiding and abetting fraud, and concealing fraudulent activities.

However, Attorney Shao believes that simply buying and selling virtual currencies such as USDT to earn price differences should not, in principle, be considered a criminal offense, as long as no actual proceeds are received and the person is unaware that others are using virtual currencies to engage in foreign exchange trading and provides assistance.

It is wrong to equate "abnormal" business with criminal offenses simply because of the "naive" understanding of the investigators. This would clearly violate the principle of restraint in criminal law.

Therefore, based on the perspectives of the above judicial practice, the issue this article needs to discuss is:

If a USDT trader or an ordinary individual, unaware that the upstream entity is engaged in currency exchange activities, instructs relatives or friends to use their bank cards to collect and pay USDT on their behalf, and if this does not ultimately constitute the crime of illegal business operations, could they be charged with aiding and abetting a crime or concealing a crime? Or, as a second-best option, could they be charged with obstructing credit card management?

Attorney Shao believes that, provided that the perpetrator does not have the subjective intent to "knowingly exchange currency for others," even if they use a relative's or friend's bank card to collect and pay on their behalf, it should not constitute the crimes of illegal business operations, aiding and abetting, or concealing. Under this premise, it should also not be considered as the crime of obstructing credit card management in principle (but in practice there is indeed a risk that the judicial authorities may interpret it more broadly and apply the crime accordingly).

In other words, the real point of contention is not whether the actor used someone else's bank card, but whether he was aware of it, how the nature of the funds is defined, and whether the understanding of "possession" of the bank card has been overly broadened.

The above-mentioned points of contention are elaborated in detail below:

The method of handling the more serious offense of obstructing credit card management

In judicial practice, if the perpetrator is ultimately found guilty of obstructing credit card management, there are two possibilities:

1. Simply constitutes the crime of obstructing credit card management.

For example, the perpetrator may acquire or control a large number of bank cards, but it has not yet been verified that these cards have flowed into upstream crimes such as telecommunications fraud. They are still in a state of "hoarding cards for sale" and have not yet actually entered the process of fund transfer or collection and payment.

2. The perpetrator's actions involved both the crime of assisting in the fraudulent activity and the crime of concealing the crime, but he was ultimately sentenced for the crime of obstructing credit card management by "choosing the more serious crime" (the maximum sentence for assisting in the fraudulent activity is three years, the maximum sentence for concealing the crime is seven years, and the maximum sentence for obstructing credit card management is ten years).

For example, the defendant not only purchased a large number of other people's bank cards, but also used these cards to withdraw cash and transfer funds for upstream crimes[i]. The court held that the defendant's behavior met the constituent elements of the crimes of obstructing credit card management and aiding and abetting cybercrime, and ultimately sentenced him for the more serious crime of obstructing credit card management.

Exclusion criteria for crimes of aiding and abetting and concealing crimes

Returning to the specific scenario discussed in this article—when a U-trader or individual uses a relative's or friend's bank card for RMB collection and payment during the buying and selling of USDT (Tether)—in this situation:

1. Is it possible that this constitutes the crime of aiding and abetting?

The answer is no. The reason is:

In cases where USDT is used for disguised currency exchange, the "currency exchange" itself is usually classified as an illegal business activity rather than a "cybercrime".

Therefore, even if the perpetrator is aware that the source of the funds may be abnormal, but does not know that the funds are used for telecommunications fraud, online gambling, or other cybercrimes, their subjective intent does not meet the requirement of "knowingly providing assistance to others who use information networks to commit crimes" for the crime of aiding and abetting.

2. Is it possible that this constitutes the crime of concealing a crime?

This conclusion remains untenable. The reason is:

In currency exchange activities, the funds circulating are the principal used for exchange, and their nature is "funds for illegal business activities," not "the proceeds of a crime (after completion)." The perpetrator's misunderstanding of the nature of the funds prevents the establishment of intent to conceal the crime.

Therefore, in the scenarios of buying and selling USDT and using relatives' or friends' bank cards for collection and payment discussed in this article, it is difficult to classify them as either aiding and abetting a crime or concealing a crime. Judicially, there is no basis for "choosing the more serious crime" to change the conviction to the crime of obstructing credit card management.

Crime of obstructing credit card management: Is it physical possession or can it be interpreted more broadly?

After ruling out the charges of aiding and abetting and concealing crimes, we can continue to examine this from two perspectives:

Firstly, if the perpetrator is found guilty of illegal business operations, then even if the perpetrator has committed the crime of obstructing credit card management, it will be absorbed by the crime of illegal business operations, and the perpetrator will not be convicted of both crimes.

Secondly, if, as discussed in this article, the perpetrator is found not to have committed the crime of illegal business operations, then as mentioned above, it is not permissible to further determine that the perpetrator has committed the crimes of aiding and abetting or concealing credit card fraud. If both of these crimes are excluded, then the crime of obstructing credit card management is the only possible option.

However, the problem is that the situation described in this article is fundamentally different from the typical scenario of obstructing credit card management in judicial practice.

The crime of obstructing credit card management typically manifests as follows:

The perpetrator purchased a large quantity of complete sets of bank card information from strangers (including bank cards, mobile phone cards, online banking U-shields and passwords, photocopies of ID cards, etc., the so-called "four-piece set") and paid for them; then the perpetrator directly controlled and operated these bank cards to conduct transactions.

In contrast, in the USDT trading scenario discussed in this article, the perpetrators used bank cards belonging to relatives or friends, and there was no situation of strangers buying and selling cards. More importantly, the bank cards were always controlled and operated by the cardholders themselves. The parties involved did not have access to the cards, passwords, or online banking permissions; the relatives or friends were merely following their instructions to complete the collection and payment on their behalf.

Therefore, the potential legal risk in this case lies in the judicial interpretation of " possession" of bank cards. If it is interpreted broadly as meaning that as long as the perpetrator can actually control or dispose of these cards (e.g., know the PIN, or instruct the cardholder to operate the card), it constitutes "possession," then the person involved does indeed face the risk of committing this crime.

However, this method of identification is fundamentally different from the typical cases in judicial practice involving the buying and selling of strangers' "four-piece sets" (a set of personal belongings), or the crime of obstructing credit card management where the cardholder directly controls the bank card.

In typical cases of obstructing credit card management in judicial practice, "possession" is essentially a physical and exclusive form of direct control.

The perpetrator, through purchase, rental, or other means, places another person's credit card under their actual custody, directly controlling the physical card, PIN, and online banking tools, and can operate independently without the cardholder's consent. This control is stable, continuous, and readily available, and its illegality is clearly evident.

The situation discussed in this article is different. The so-called "control" of a bank card by the perpetrator is actually an indirect, functional authorization of use based on a specific relationship (relatives and friends) and mutual agreement (instructions for collection and payment). The perpetrator does not possess the physical card, nor does he/she have access to the core password information. Every transfer of funds requires the cardholder's cooperation to be completed. This control is conditional and unstable.

Therefore, Attorney Shao believes that directly equating this instruction-based, indirect financial channel relationship with the criminal act of "illegally possessing another person's credit card" is essentially an over-interpretation of the law.

The circumstances described in this article should not be considered as constituting the crime of obstructing credit card management.

In conclusion

In cases involving new types of crimes such as virtual currency, the forms of crime are constantly changing, and judicial practice exhibits significant diversity and uncertainty. Therefore, there are often gaps in the application of the law.

In such a "borderline" area between crime and innocence, whether an appropriate legal evaluation can be made of the perpetrator often depends on the details of the evidence and the sufficiency of the legal argument; when there is a dispute, which side the scales of justice will tip towards is precisely where the value of criminal defense is reflected.

Therefore, when handling criminal cases, defense lawyers must also pay close attention to every factual detail, every chain of evidence, and every point of legal contention in order to strive for the most favorable outcome for their clients.

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