Crypto P2P Trading and Frozen Account Risk

How a normal crypto sale ends in a frozen account

You sold crypto peer to peer (P2P), the buyer paid into your bank account, and the deal closed. Days later, your account is frozen. This is one way an ordinary trader can end up in a mule account investigation.

The cause can be simple. The buyer paid you with money stolen from a scam victim, who has now reported it. When police trace the victim’s transfer, your account shows up in the trail.

For the basics first, read how account freezes work.

The law looks at the money, not the coin

You may assume the freeze is about crypto. The problem is receiving money that turns out to come from a crime.

Penal Code section 424C covers transactions through an account without a lawful purpose. It carries 3 to 10 years in jail, or a fine of RM10,000 to RM150,000, or both. ^[f1] Because it is about the transaction, a genuine seller can still be questioned.

Under AMLA 2001 section 50, the Public Prosecutor can also order a bank to hold money suspected to come from crime. ^[f5] Neither law is about the coin. Both are about the money.

Why the freeze comes without warning

A scam victim can call the National Scam Response Centre hotline 997, which can trigger urgent freezes on the accounts that received the money. ^[f4] This is meant to stop the money before it disappears.

Criminal Procedure Code section 116D also lets a police officer of Sergeant rank or above freeze an account without a court order. ^[f2] So a trader can be frozen quickly, with no notice.

This speed protects victims, but it can also catch innocent people who happened to be next in the chain.

Check before you accept a payment

You can check whether an account or phone number has been flagged. Anyone can search the PDRM Semak Mule portal, and more than 190,000 accounts had been flagged as of 2024 to 2025 reports. ^[f3]

If a buyer’s details show up there, do not trade with them. It will not lift a freeze you already have, but it can help you avoid the next one.

The records that show you are a genuine seller

What sets a genuine trader apart is records made at the time of the trade. Keep your platform trade history, chat logs, the buyer’s user ID, wallet addresses and times.

A screenshot of the platform order next to the matching bank credit shows a real trade at a real time. With that, a lawyer can present it as a normal sale, not knowingly moving dirty money.

To understand the label being used against you, read what a mule account means.

What to do as soon as you are frozen

Stop using the account and do not move the balance. Do not contact the buyer to demand an explanation, as it can complicate the investigation and look bad.

Collect every record of the trades in question. Then get advice before you give a police statement. Our what to do now checklist lists the first steps in order.

How you first explain the trade shapes the whole case. A lawyer can help you prepare that explanation and come with you to the statement.

Habits that lower your risk next time

Before you accept a large transfer, check the buyer’s details. Be careful if a buyer is in an unusual hurry, pays through a third person, or sends an amount that does not match the order.

Keep each trade inside the platform where you can, so the record is complete. Refuse deals where you receive money and then pass most of it on. That pattern looks exactly like a mule chain.

No habit can fully protect you, because the problem starts with someone else’s fraud. But careful habits make it less likely, and leave a clean record if questions come up.

Sources

1. Penal Code, section 424C (lawnet.com.my)
2. Criminal Procedure Code, section 116D (parlimen.gov.my)
3. Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), section 50 (lawnet.com.my)
4. PDRM Semak Mule portal (semakmule.rmp.gov.my)
5. National Scam Response Centre, hotline 997 (nsrc.gov.my)