If you take USDT as payment and cash out through peer-to-peer trades, a frozen bank account is the most concrete risk you face. It is not a rare disaster—it is the thing that eventually happens to people who do this long enough.

You sell USDT to a buyer, the fiat lands in your account, and then the account is frozen—because somewhere upstream in that buyer’s money, the police have an open case. You did nothing wrong and you have no way to have known.

CoinDesk reported in June 2020 that Chinese police had frozen several thousand bank accounts belonging to OTC traders over exactly this, most of them in Guangdong. The pattern has not changed since.

There is a clear starting point. On 2 March 2020 the US Treasury sanctioned—and the Justice Department indicted—two Chinese nationals, Tian Yinyin and Li Jiadong, for laundering more than US$100 million for North Korea’s Lazarus Group. The attackers stole from exchanges, moved the proceeds through layers of transfers, and cashed out through OTC brokers’ accounts.

OTC channels became a priority target from that point on. For an ordinary user the consequence is this: who your counterparty is, and where the money they paid you came from, is now your risk—and it is not something you can check beforehand.

Some exchanges now run vetted P2P zones with compensation schemes: trade with a certified merchant, and if the fiat still gets frozen, the platform makes you whole. That is a real improvement, and worth using if you are trading on that platform.

Read the scope carefully, though. Compensation applies on that platform, with those merchants, under those rules. It is insurance inside one venue, not a property that travels with you.

The honest summary: nothing removes the fiat leg’s exposure, because that leg runs through banks and banks answer to law enforcement. What you can decide is how much of your money is sitting on that leg at any moment, and where it goes back to when something stops.