Tips to avoid bank freeze and Lien

[Bitcoin Smith]

I just got the idea to write how people can stay away from bank freeze issue which is by far the most serious issue with Indian crypto users after reading a thread on reddit and I feel that is incomplete so I am writing things which I feel is safe way so any of you guys can add our tips too.

1. If you want sell your BTC or any crypto for INR avoid payment modes like IMPS or UPI platforms which often end up as bank freeze or lien.
2. Consider the Cash Deposit (CDM) which mean the buyer will directly deposit funds in your bank account so there is no trail of laundering here.
3. You can find CDM offers but with premium price which is worth if you don't want your bank account to get locked.
4. Never trade with anyone in person like f2f or if they invite you to telegram or whatsapp after a few successful trades on p2p platforms.
5. Finally use separate bank account for crypto trading and try to keep it's balance close to zero.

[henmark]

Consider the Cash Deposit (CDM) which mean the buyer will directly deposit funds in your bank account so there is no trail of laundering here.

Frequent cash deposit will trigger other questions? Like, if cash deposit/withdraw amounts exceeding 10 lakh in a financial year may get reported to income tax authorities by bank. Similarly we cannot accept cash deposit higher than 50k rupees without PAN. (Anyone may deposit cash up to 50k rupees in bank account but person to person cash transaction should be lesser than 20k).

Still I agree that receiving in cash must be safer in terms of preventing all traces of where your money coming from.

Finally use separate bank account for crypto trading and try to keep it's balance close to zero.

This must be a wise suggestion. These days we could open a new bank account without visiting branches. So, having a dedicated bank account only for crypto P2P trades is easier and must be having big positive for not getting your other funds on any unexpected event.

[Bitcoin Smith]

Consider the Cash Deposit (CDM) which mean the buyer will directly deposit funds in your bank account so there is no trail of laundering here.

Frequent cash deposit will trigger other questions? Like, if cash deposit/withdraw amounts exceeding 10 lakh in a financial year may get reported to income tax authorities by bank. Similarly we cannot accept cash deposit higher than 50k rupees without PAN. (Anyone may deposit cash up to 50k rupees in bank account but person to person cash transaction should be lesser than 20k).

Still I agree that receiving in cash must be safer in terms of preventing all traces of where your money coming from.

Banks no need to report them since PAN is linked with bank accounts the government and IT can track anyone's financial record of all their banks combined in just a single click. But it is common that they will likely to track user who receive lump sum like one big deposit of 10L or anything above 25L combined in a financial year, but those risks are none compared to losing our bank account with all the balance in it.

And we all have family members who got bank account and may not receive much deposit other than government relief, so we can use theirs as well to increase the limit.

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I agree with this still I may go for trading outside the P2P platform but in affordable level. This is purely depends on your risk appetite. This helped me when a platform got sudden shutdown. I am not recommending to do so, but wanted to share that there are still honest people in P2P space as well.

I wouldn't because even if I have done over 100 successful trades with no redflag at all with someone still they can simply choose to block me once we went outside the platform and there is no middlemen to handle if there's a dispute. You can consider if they are willing to go first and deposit funds in bank then you can move crypto to them.

[TSen]

I am converting crypto<>cash from years and never had bank freeze issue. I wonder how much amount might trigger bank freeze? I have even dealt in lacks over night but still never had issues. In-fact, I once had a current account which I solely used for crypto buying and selling on localbitcoins and wazirx back then. I never had such issues and even never heard about it within my friends circle.

I guess if someone adds a note about cryptos in payment method or reports the transaction is when bank might freeze the account. That's the reason I have a few specific P2P traders with whom I have created good relations and they can always help me out in such trades in just one call. Even after that, I never traded off platform. I have always used trusted platforms as intermediaries to make such trades.

[Bitcoin Smith]

I guess if someone adds a note about cryptos in payment method or reports the transaction is when bank might freeze the account. That's the reason I have a few specific P2P traders with whom I have created good relations and they can always help me out in such trades in just one call. Even after that, I never traded off platform. I have always used trusted platforms as intermediaries to make such trades.

I am answering the second part first because that's the order this happens. Back then RBI banned crypto trading and allowed banks to freeze bank accounts who involves crypto trading which was later lifted by Supreme court's order, so it is completely okay to leave remarks now and banks can't freeze for that reason anymore.

I am converting crypto<>cash from years and never had bank freeze issue. I wonder how much amount might trigger bank freeze? I have even dealt in lacks over night but still never had issues. In-fact, I once had a current account which I solely used for crypto buying and selling on localbitcoins and wazirx back then. I never had such issues and even never heard about it within my friends circle.

Any amount can lead to bank freeze as long as it trails back to some kind of scam investigation and I read that even 100 INR triggered the entire bank freeze and even I mentioned one in my other thread.

[TSen]

^ Still now, I would avoid leaving notes in payments about crypto transactions. P2P transactions do not directly link cryptos to our banks account so it is always better to keep it that way and maybe we can get some tax relief as well. I would not really want to pay 30% tax for my crypto cash-out instead I would show that as a business profit and would love paying 12% tax as per my taxation slab. If crypto is mentioned anywhere in the remarks than I would be forced to pay the 30% tax as per my yearly audits which I do not really want.

[Bitcoin Smith]

A side tip, this came to my mind after reading another thread.

Don't use your bank account which has gold loan or any kind of loan that is associated with that account because when you trade p2p there is always risk of the account freeze so if you got loan in the account let's say gold then you can't pay it back at all unless you clear your lien amount and any amount you try to deposit will be deducted for lien not for the loan. SO keep your primary account safe from p2p traders.

[pawanjain]

A side tip, this came to my mind after reading another thread.

Don't use your bank account which has gold loan or any kind of loan that is associated with that account because when you trade p2p there is always risk of the account freeze so if you got loan in the account let's say gold then you can't pay it back at all unless you clear your lien amount and any amount you try to deposit will be deducted for lien not for the loan. SO keep your primary account safe from p2p traders.

That is a good tip. I almost forgot about this but yeah this is a good awareness for those who are regularly doing P2P trades and have an active loan.
So far I have mostly done my P2P trades with one trader only with whom I have been trading since last few years.
Also, I don't enter any remarks since I know trading with him is only for one reason.
But yeah, its better to avoid our main account and loan account for doing P2P trades. You never know when bad luck strikes you.

[Bitcoin Smith]

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So far I have mostly done my P2P trades with one trader only with whom I have been trading since last few years.
Also, I don't enter any remarks since I know trading with him is only for one reason.
But yeah, its better to avoid our main account and loan account for doing P2P trades. You never know when bad luck strikes you.

Nowadays opening bank account is quite easy, except SBI every bank offers instant registration followed by video KYC which will took from 15 to 30 minutes and all it takes Aadhaar and Pan to open the working bank account no matter which part where we are living in the country. Yet some doesn't think about the worst possibility and just use their same account for everything that will get them into a dead end if they are facing lien.

[LucyFurr]

I would like to add some:

• Never accept third party payments, always cross check the funds you received is same as the trading partner who will shown verified name on the p2p exchanges.
• And always go for the traders with high trade count and number of positive feedbacks, like atleast a thousand completed trades successfully

[Bitcoin Smith]

Use Digital Rupee platform to do transactions for crypto in india, usually cheapest and safe.

India's digital Rupee aka E-rupee is not a solution for this bank freeze, many reported that people who received erpuee in Binance p2p and other p2p platforms had trouble and alsmo similar to the bank freeze and erupee can be frozen instantly, without need to contact the bank and they freeze for themselves.