TL;DR

If your Hong Kong bank account is frozen or police have contacted you about crypto transactions, act fast. Common allegations include fraud (s.16A Theft Ordinance) and “dealing with proceeds of crime” (s.25 OSCO), often triggered by funds routed from a third party you didn’t know. Police can maintain freezes using the “Letter of No Consent (LNC)” mechanism while they investigate. You need to stop dealing with disputed funds, document your bona fides, and get legal counsel to engage banks, exchanges, and investigators strategically.

Why “Innocent” Traders Get Pulled Into Criminal Cases

A typical pattern we see:

You trade tokens with a counterparty over several successful deals.
On the next trade, payment arrives from a different account (you may be told it’s a “partner” or “alternate wallet”).
Later, that account is reported as belonging to a fraud victim.
You’ve already released tokens—and now you’re treated as a suspect or potential money launderer while the real scammer disappears.

Under Hong Kong law, money laundering does not require the prosecution to prove the property actually came from a specific predicate crime; the test focuses on whether you knew or had reasonable grounds to believe the property represented criminal proceeds when you dealt with it (Organised and Serious Crimes Ordinance, “OSCO,” s.25). Maximum penalty: 14 years’ imprisonment and HK$5M fine.

Separately, prosecutors can charge fraud (s.16A Theft Ordinance) or related deception-type offences, depending on facts (e.g., misrepresentations, documents, or arrangements). Fraud carries up to 14 years’ imprisonment.

“My Account Is Frozen”—What Just Happened?

Two common routes:

Bank freeze via “Letter of No Consent (LNC)”
If a bank files a Suspicious Transaction Report (STR) and the Police withhold consent to deal with funds, the bank will typically restrict the account. In Tam Sze Leung v Commissioner of Police [2024] HKCFA 8, Hong Kong’s Court of Final Appeal confirmed that the Police’s LNC practice under OSCO is lawful and constitutional—so it will be used while investigations continue.
Crypto exchange lock-out
Licensed and overseas exchanges can freeze assets under their Terms & Conditions or in response to law-enforcement requests. Practically, your recourse runs through contractual rights and regulator/law-enforcement engagement, not a simple “unfreeze” button. (Context: Hong Kong has tightened and evolved VA oversight post-JPEX and continues to refine its virtual-asset regime.)

The Legal Labels You Might Hear (Plain English)

Money laundering (OSCO s.25): Dealing with property you know or should have suspected is crime-linked—“dealing” is broad (receiving, transferring, converting, etc.).
Failure to disclose (OSCO s.25A): If you know or suspect property is crime-linked and don’t report to an authorised officer, that’s an offence itself.
Fraud (Theft Ordinance s.16A): Dishonest act to induce economic loss or gain—max 14 years.
Conspiracy to defraud (common law): Agreement to dishonestly prejudice another’s economic interests—often used in complex financial/crypto fact patterns.

Immediate Steps If You’re Accused or Your Account Is Frozen

Stop dealing with the flagged funds/assets immediately. Further movement can compound exposure under OSCO s.25.
Collect evidence of good faith:
- Full trade history (wallet hashes, order IDs, chat logs, contracts, invoices).
- Source of funds trail from your side (bank slips, exchange statements).
- Counterparty KYC you performed (screenshots/emails; even informal checks help).
Do not contact alleged victims or unknown intermediaries without advice.
Engage counsel quickly to (a) correspond with the bank/Police over the LNC, (b) open channels with exchanges, and (c) prepare a defence narrative consistent with records. The CFA’s position on LNC makes procedural handling critical.
Consider a protective disclosure if you’ve formed suspicion about certain funds (OSCO s.25A). Timing and wording matter—speak to counsel.

What TITUS Does for You (Quick, Practical, Defence-Minded)

Crisis triage & risk map: We assess allegations, evidence gaps, and your exposure under OSCO s.25/s.25A and fraud statutes.
Bank & Police engagement: Prepare targeted submissions for LNC situations; liaise with investigators and bank AML to shape the fact pattern accurately.
Exchange strategy: Navigate T&Cs and regulator interfaces to pursue staged access, partial releases, or preservation of positions.
Evidence workbook: Organise your trade records, on-chain analysis references, and counterparty trail into a coherent good-faith narrative.
Defence planning:
In the event criminal charges are pursued (e.g., fraud, conspiracy to defraud, or offences under the Organized and Serious Crimes Ordinance), we will:

thoroughly review the prosecution evidence and charges;
provide expert analysis and strategic input;
make targeted representations to the Department of Justice where appropriate.

If parallel civil proceedings are commenced, we will:

analyse the pleadings and evidential material;
develop and execute a robust defence strategy;
pursue favourable settlement or mediation opportunities as they arise

Victim Representation & Remedies

Where you have been the victim of fraud, conspiracy to defraud, or related offences (including OSCO predicate offences), we will act promptly and decisively on your behalf by:

collating and preserving all relevant evidence;
preparing and lodging comprehensive criminal reports with the Hong Kong authorities;
making follow-up representations to the Hong Kong authorities to secure investigation, asset freezing orders, and prosecution;
simultaneously review your options for pursuing civil remedies, including Mareva injunctions, Norwich Pharmacal disclosure orders, and proprietary or constructive trust claims;
commencing proceedings to secure the recovery of your assets; and
engaging in settlement negotiations or mediation once maximum leverage is achieved.

FAQs

Q1: How long can a bank freeze last under an LNC?
There’s no fixed statutory “freeze period.” The CFA confirmed the lawfulness of the regime; duration depends on ongoing investigations and communications with banks/regulators. Your legal team’s engagement often determines momentum.

Q2: If I’m a genuine victim, why am I treated like a suspect?
The OSCO framework targets dealing with suspected proceeds. Investigators look at what you knew/should have known at the time—hence the emphasis on your due-diligence and decision trail.

Q3: Can I get my exchange account unlocked?
Possible, but it’s fact-specific. We combine contractual arguments (T&Cs), law-enforcement correspondence, and evidence to request narrower holds or releases.

Q4: I received funds from a “friend of my counterparty.” Is that risky?
Yes—third-party payers are a recurring hallmark of fraud cases and money-laundering allegations. If this happens, pause and escalate checks.

Checklist You Can Use Today

☐ Keep all chat/email/trade confirmations.
☐ Save bank slips, exchange CSVs, and wallet hashes.
☐ Note who paid you, from where, and why.
☐ If a new payer appears: stop, ask for docs, and record the reason.
☐ If contacted by police/bank AML: be polite, brief, and refer them to your lawyer.
☐ Consider an OSCO s.25A disclosure—but only after legal advice.

Why TITUS

We’re one of the few Hong Kong firms combining crypto fluency with dispute/defence experience. We act fast, speak the language of banks, exchanges, and investigators, and build the documentary record that shows you as a good-faith market participant—not a criminal conspirator.

Contact TITUS (Immediate Help)

WhatsApp: +852 9720 3003
Tel: +852 3702 0045
Email: info@titus.com.hk
Address: Suite 4002, 40/F, Lippo Centre Tower 1, 89 Queensway, Admiralty, Hong Kong

If your account is frozen or you’ve been contacted by law enforcement, message us now—speed matters.

When Crypto Trading Gets You in Trouble: What to Do if You’re Accused of Fraud or Money Laundering in Hong Kong