If Zhou's friend had a large amount of LR he wanted to convert then presumably he has the funds to retain a lawyer who can advise him about the wisdom of agreeing to such an arrangement.  His friend should certainly be made aware that his funds are now the subject of an AML investigation, though, before he's asked to agree to them being moved anywhere else or to receiving them back through an indirect means.  The more roundabout, intervening transactions there are between him giving the funds to Zhou to exchange and him receiving his funds back, the more it's going to look like money laundering to any investigator (especially if the source from which the funds are being returned can't be confirmed).


Neither you nor I know whether AurumXchange can release funds which are the subject of an AML investigation and if so under what circumstances and to whom.  Whatever persuasive arguments you may believe you have for them releasing those funds, the only people they should be listening to regarding that are their own legal advisors and their AML regulator.  There is no reason whatsoever they should risk legal fall-out themselves for the convenience of others.  They most certainly didn't create this clusterfuck and the have every right to protect themselves first and foremost from the legal risks which the money launderer brought to their door step.


And often the whole account will be frozen until the legitimacy of all the funds in the account can be established.