• Legal Advice on Lien Marked on Bank Account Due to Binance P2P Transaction – Layer 2 Involvement & Cyber Crime Case

Dear Lawyer,

I need legal guidance regarding a legitimate Binance P2P transaction that has now been linked to a cyber fraud case in India. I am an NRI residing outside India and currently unable to visit the police station or cyber crime office in Uttar Pradesh to resolve the issue in person.

Scenario:

On 8th January 2025, I sold USDT worth INR 50,000/- via Binance Peer-to-Peer (P2P) to a verified buyer who transferred the amount to my Axis Bank account.

I conducted due diligence by verifying the buyer’s identity through Binance-provided details and KYC documents, ensuring it was *not a third-party transaction*.

After confirming that the sender’s name matched the buyer’s name on Binance, I released the USDT via Binance’s escrow mechanism.

I later received an email from Axis Bank’s Cyber Cell stating that a lien (not a freeze) has been placed on the said transaction of 50k on my bank account as per instructions from the Cyber Crime Police of Uttar Pradesh, alleging that the transferred funds were linked to a fraud case.

As a NCRP case was filled by the victim (third person) who was scammed by the buyer who purchased USDT from me.

I am now considered a Layer 2 recipient in this case since the fraudster (who tok INR from Victim and sent me that INR to buy Crypto USDT) used my Binance P2P order to liquidate stolen funds into crypto.

Current Status & Supporting Evidence:

I have all supporting proof, including:

Digitally signed Binance order receipts for the transaction.
Bank statements showing the transaction.
KYC details of the buyer (Aadhar/Pan)
Details of Binance’s legal portal for law enforcement inquiries

Despite my attempts to contact the investigating officer, the provided contact number is out of coverage, and I am unable to get any clarification on the next steps.

My Concerns & Queries:
1. Am I legally liable for the fraud committed by the buyer who used my Binance P2P order to buy USDT?
2. Can the police demand that I compensate the victim for their loss, even though I was not involved in the fraud.
3. Can i be arrested? I have just emailed the cyber police with the proofs & a video stmt - but unable to contact them on call as their number is un-reachable (I got their email id & number from NCRP notice sent by my Bank).
4. How do I respond to an upcoming 91/102 Cr.P.C. notice if issued by the police?
5. Since I am an NRI and unable to appear in person, how else can formally communicate my response to the police?
6. What steps can I take to avoid getting dragged into a legal case or unnecessary proceedings?
7. The NCRP case was lodged in UP and my home state in india is Gujarat.

I appreciate your time and expertise in this matter. My primary concern is to resolve this quickly without getting entangled in a legal battle, as I have acted in good faith and followed all necessary precautions while trading.

Looking forward to your advice.

Best Regards,
Anuj Baid
Asked 11 days ago in Criminal Law
Religion: Hindu

First answer received in 30 minutes.

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11 Answers

The first thing that you should do is file an RTI application seeking details of the said occurrence. also ask why a mandatorily required notice was not sent to you. i will tell you the next steps then. i had lien removed from a number of my clients' bank accounts.

Gagandeep Singh Thandi
Advocate, Pathankot
68 Answers

  1. As the fraudster used your binance order to buy usdt, you are prima facie in collusion with the  main accused. During investigation you can establish your innocence but you need to cooperate with investigation.
  2. All the accounts of fraudster will be freezed and victim will compensated from his accounts.
  3. All offence under cyber fraud are bailable. On appearance you will be released on execution of personal bond.
  4. Any summons under Section 91 are deemed to be complied if the property/document is produced without attending the police station.
  5. To avoid any proceedings under Section 102, you need appear and convince the police of you innocence.
  6. You need to appear in u.p. where the case is registered.
  7. You can approach High Court seeking to quash FIR against you or at least as alternative grant anticipatory bail to you.

Ravi Shinde
Advocate, Hyderabad
4523 Answers
42 Consultations

1) you are not laible to compensate victim for the loss 

 

2) fraudster is liable 

 

3) you can send reply by speed post 

 

4) no FIR has been filed against you 

Ajay Sethi
Advocate, Mumbai
97716 Answers
7915 Consultations

Legal Advice on Binance P2P and Bank Account Lien:

  1. Legal Liability: You are not liable for the buyer’s fraud as you acted in good faith, verified the buyer’s identity, and used Binance’s escrow system. Provide evidence of due diligence.

  2. Compensation Demand: Police cannot demand compensation unless you are proven complicit or negligent.

  3. Risk of Arrest: Arrest is unlikely if you cooperate. Continue submitting evidence and maintain communication with authorities.

  4. Responding to Notices: For Section 91/102 Cr.P.C. notices, submit required documents via a lawyer. Request virtual communication if unable to appear in person.

  5. NRI Communication: Appoint a lawyer in Uttar Pradesh, send notarized affidavits, and request Binance to assist with law enforcement inquiries.

  6. Avoiding Legal Issues: Preserve all records, engage a local lawyer, and file a representation to release the lien. Escalate the matter if the investigating officer is unreachable.

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated. Thank you. Shubham Goyal.

Shubham Goyal
Advocate, Delhi
667 Answers
3 Consultations

after going through the facts i do not think you are legally liable

in the event you get any summons from police you just need to co-operate and inform how the entire transaction took place

the seller would never know that the buyer's funds are proceeds of crime

moreover the transaction occurred through banking channels

i think it is not correct on your bank's part to mark a lien on the sale proceeds credited to your bank account

i think you need to relax 

you may be a layer 2 recipient, but that does not of itself make you legally liable for the wrong that has happened to the victim at the hands of your buyer, unless it is proved otherwise

Yusuf Rampurawala
Advocate, Mumbai
7780 Answers
79 Consultations

Dear Client,

As your transaction was bonafide, carried out in good faith, and madewith due diligence, you cannot be held criminally liable for the fraud perpetrated by the buyer. However, since the Cyber Crime Police of Uttar Pradesh has traced your account to the case, they might treat you as a witness or an intermediary. This is a lien placed on your account. While the police cannot demand money from you, they may try to get it back by coercing you to pay it. You are notliable in the eyes of the law unless you can be shown to have had knowledge about the fraud being perpetrated.

 

You have nothing to fear regardingbeing arrested. Still, you may want to get a lawyer in UP to monitor the case and to formally respond. If the police send a notice, you should hand over documents, such as the transaction records of Binance, bank statements, and KYC details of thebuyer. Under 106 BNSS freezing of accounts, your attorney should file objections and present this before the magistrate to have the lien removed. Since you are an NRI, you can formally communicate through a notarized affidavit, email correspondence, and video statements, requesting virtual interaction instead of in-person visits.

 

To avoid further complications, ensure proper legal representation, submit all necessary evidence to the police, and request Binance's legal support. If the lien is not lifted, escalate the matter to the Banking Ombudsman or file a case in the jurisdictional court. Since the case was filed in UP, you can also seeka transfer of jurisdiction to Gujarat under Section 446 of BNSS if required. Do not settle the case without alawyer as this may be construed as an admission of guilt. Your main defense is that you were a bonafide trader andhad no hand in fraudulent activities. Taking these steps in time will help resolve the matter without unnecessary legal entanglements.

Anik Miu
Advocate, Bangalore
10455 Answers
121 Consultations

In this circumstances you are not liable for any fraud but if you get any call or notice from police take legal advice first. You need to apply to the court for removing the lien 

Prashant Nayak
Advocate, Mumbai
33017 Answers
214 Consultations

Dear Anuj,

Your concerns are valid, and I appreciate your detailed account of the situation. Below is a structured legal response addressing your queries, along with recommended steps to protect yourself from further complications.

1. Legal Liability – Are You Responsible for the Fraud Committed by the Buyer?

Based on the information provided, you do not have direct criminal liability since:

  • You conducted due diligence by verifying the buyer’s details.
  • The transaction was executed via Binance’s escrow system, with proper identity checks.
  • There was no intent to defraud, and you had no prior knowledge that the funds were proceeds of a cybercrime.

However, being classified as a Layer 2 recipient means you may be required to cooperate with the investigation to prove your innocence.

2. Can the Police Demand That You Compensate the Victim?

  • Legally, you are not obligated to compensate the victim unless it is proven that you were complicit in the fraud, which is not the case here.
  • If the police pressure you to refund the amount voluntarily, it should be done only after obtaining a written assurance from the investigating officer that no further legal action will be taken against you.
  • If you decide to return the amount to the victim to expedite case closure, ensure it is routed through official channels (such as an escrow account held by the police).

3. Can You Be Arrested?


  • Immediate Arrest Risk: Since this is a cybercrime-related financial case, arrest is unlikely unless there is evidence of active participation in the fraud.
  • However, since the investigation is ongoing and your bank account is under lien, there is a possibility that the police may summon you for questioning.
  • You have already emailed the police with supporting evidence, which is a positive step. It is crucial to continue this communication in a structured legal manner (see Point 5).

4. How to Respond to a Notice Under Sections 91/102 Cr.P.C.?

  • Section 91 Cr.P.C. (Documentary Evidence): If you receive a notice under Section 91, it means the police are requesting you to provide documents relevant to the investigation. You should:

    • Respond formally in writing, attaching:

      • Binance transaction receipts
      • KYC details of the buyer
      • Your bank statements
      • Any prior correspondence with the police

    • Mention that you are an NRI and unable to appear in person, requesting alternative means of communication  (Legal representation)

  • Section 102 Cr.P.C. (Seizure of Property): If your account is only under lien and not fully frozen, it indicates a preliminary attachment rather than full seizure. However, if an FIR is registered, the bank may fully restrict access to your funds.


    • Request the police for clarity on whether your funds are being held as "evidence" or if they intend to return them after verification.
    • If the lien persists without justification, you can file a representation to the Superintendent of Police (SP) or approach the High Court for relief.

5. How to Respond If You Cannot Appear in Person (As an NRI)?

  • Since you are residing abroad, you have the following options:


    • Legal Representative in India: Appoint a lawyer who can physically interact with the investigating officer and represent your case.

6. Preventive Measures to Avoid Legal Hassles in the Future


  • Keep Detailed Records: Maintain transaction history, KYC proofs, and email logs for every crypto trade.

  • Check for Suspicious Transactions: If a buyer’s payment source looks unusual (third-party transfers, multiple accounts), reject the transaction.

  • Use Exchange-Compliant Accounts: If trading regularly, use an exchange-friendly account from a bank that has compliance protocols for crypto transactions.

  • Consult a Legal Expert for Future Transactions: If you continue P2P trading, it may be wise to get a legal opinion on the structure of transactions to avoid legal risks.

7. Jurisdiction Issue – Case Filed in UP While You Are from Gujarat

Since the complaint is filed in Uttar Pradesh, local police there have jurisdiction. However:

  • If you ever need to file a petition for relief, it can be done in Gujarat, where you hold a permanent residence, under Article 226 of the Constitution (High Court Writ Jurisdiction).
  • A lawyer can also seek case transfer to a jurisdiction more convenient for you.

Conclusion – Next Steps for Quick Resolution

  1. Immediate Response to Cyber Police:

    • Send a detailed email response enclosing all supporting documents.
    • Clearly state that you acted in good faith and had no knowledge of any fraud.
    • Request a formal acknowledgment that your response has been received.

  2. Engage a Lawyer in India:

    • Appoint a legal representative in India who can visit the police station on your behalf.
    • The lawyer can also file a representation to remove the lien on your account.

  3. Seek Removal of Lien from the Bank:

    • After submitting your response, follow up with the bank’s nodal officer to inquire about the next steps for lifting the lien.

  4. Be Prepared for a 91 Cr.P.C. Notice:

    • If you receive a notice, respond in writing, attaching all requested documents.
    • Politely request a virtual meeting if required.

  5. Escalate If No Response from Police:

    • If you receive no update from the police despite multiple attempts, a legal notice can be sent to the Cyber Crime SP seeking a resolution.
    • As a last resort, a petition can be filed in the High Court for relief against harassment and wrongful lien.

Final Recommendation

Given the complexities of cybercrime investigations, I strongly recommend engaging an experienced cyber law and financial fraud defense lawyer in India. I can assist in drafting a formal legal response and representing your interests before the authorities.

Would you like me to draft a formal response for submission to the Cyber Crime Police and Axis Bank? Let me know how you’d like to proceed.

For further finalization and strategizing, Contact/WhatsAPP On  - Nine Five NIne two Five Zero Zero Zero Six Eight 

Best Regards,

Sharan Chopra
Advocate, Chandigarh
64 Answers

1. Whether knowingly or unknowingly you were involved into this transaction hence you are liable to explain your role as a statement to the police investigating this crime.

2. If you have not been named as one of the fraudster but just this transaction was done by the other party who cheated the victim, you may explain it in the form of an affidavit to enable you to convince police to not to penalise you.

3. There is necessity to be panicked over the development.

4. If you have been served with notice under section 91 cr.p.c. then you are required to comply with it.

5. You can send the hard copy of the evidences in your possession to the police by post 

6. You wait for the next communication from police in this regard to take further steps.

7. The NCRP is a centralized platform for registering cybercrime complaints. Complaints are automatically assigned to the relevant state or union territory. 

T Kalaiselvan
Advocate, Vellore
87918 Answers
2368 Consultations

Your situation is complex but not uncommon in cryptocurrency-related fraud cases. Below are the legal aspects and recommended steps to protect yourself:

Legal Position & Liability:

  1. Are you liable for the fraud?


    • No, you are not directly liable for the fraud committed by the original fraudster.
    • However, you are a Layer 2 recipient, meaning you unknowingly received fraudulently obtained money. This can lead to police scrutiny but does not make you guilty of fraud.

  2. Can police demand that you compensate the victim?


    • No, legally, the responsibility lies with the fraudster who scammed the victim.
    • However, if the police freeze your funds, you may have to go through legal channels to release them.

  3. Can you be arrested?


    • Unlikely, unless the police believe you were actively involved in the fraud.
    • Since you have documentary proof of your genuine transaction, you should not be arrested.
    • However, if an FIR is registered against unknown persons and your name is added later, you may have to apply for anticipatory bail.

Response to 91/102 Cr.P.C. Notice:

  • Section 91 Cr.P.C. (Production of Documents)

    • If you receive a notice under Section 91 Cr.P.C., it means the police want you to submit documents related to the transaction.
    • You should email your response along with supporting documents to the official police email.

  • Section 102 Cr.P.C. (Seizure of Property)

    • If police freeze your account under Section 102, you can file an application before the Magistrateseeking removal of the freeze.

Steps to Take:

  1. Formal Communication with Police

    • Since you are an NRI, you can authorise an advocate in India to communicate on your behalf.

    • Send an email to the cyber police explaining your position, attaching all supporting documents.

  2. File a Legal Representation

    • If you do not receive a response from the police, engage a lawyer in Uttar Pradesh to file a legal representation stating:

      • You acted in good faith and verified the buyer’s identity.
      • The funds were received as part of a legitimate transaction.
      • You had no knowledge of any fraud or scam.

  3. Avoid Further Legal Issues


    • Do not attempt to transfer the frozen funds until the issue is resolved.
    • If police escalate the case, you may have to apply for anticipatory bail to avoid unnecessary legal trouble.

  4. Jurisdiction Issue (Case in UP, Your Home State is Gujarat)

    • Since the complaint is in Uttar Pradesh, legal proceedings (if any) will take place there.
    • You should hire a lawyer in UP to represent you if required.

Next Steps:


  • Engage a criminal lawyer in UP to handle police communication.

  • Email the police with all supporting documents and request a response.

  • Do not ignore legal notices, even if you are abroad.

If needed, I can assist in drafting your formal response to the police or guide you on appointing legal representation.

Thanks and Regards,
Advocate Aman Verma
Legal Corridor


Aman Verma
Advocate, Delhi
318 Answers

1. No

2. You can send a letter to the cyber cell after mentioning the details

3. You can sent the said reply through post and email , and forward one copy to the bank

4. Send Reply 

5. You can engage a lawyer to appear on your behalf

6. If no response from the cyber cell after getting your reply then approach the Court to get anticipatory bail 

7. You should approach the UP cyber office and you may also contact the head office of cyber cell in New Delhi. 

Mohammed Shahzad
Advocate, Delhi
14839 Answers
225 Consultations

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