Lawyer: How to recognize the marketing project in the Web3 coat

Author: Liu Zheng wants

Original link: https://mp.weixin.qq.com/s/z5vzunLK aJKw4hF9mWpaA

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Introduction

Recently, lawyer Liu ' s consultations have started again。

A friend sent a message that he had joined a "global go-to-centre credit sharing project" last year, paid $20,000 for economic node activation, and then pulled three friends in, and paid another 20,000 each, so he could get an "extension bonus". The question of friends is: Is this legal

When I finished, I said, "It's not a virtual currency project, it's probably a marketing project。

In recent years, as the concept of virtual currency has gained ground, a large number of projecters have begun to wear the "Web3" jacket, packaging traditional distribution patterns into high-profile terms such as "de-centralized ecology", "global nodal consensus" and "calculated mining" and so forth, making it hard to tell ordinary people. Today, lawyer Liu came to talk about how to identify the distribution of virtual money. What legal risks do you face once involved

What's a distribution? What's the legal word

Many people think that marketing is just a "selling scam", but according to our law, the essence of distribution is clearly defined。

Under article 2 of the Regulations on the Prohibition of Marketing, distribution is defined as the act by which the organizer or operator ' s developer earns an illegal benefit, disrupts the economic order and affects social stability by calculating and paying a person ' s remuneration on the basis of the number of persons developed, either directly or indirectly, or the performance of the sale, or by requiring the developer to qualify for membership at a certain cost。

Translating into a language that most people can understand: as long as the following three characteristics are met, basically it's marketing -

First of all, the entrance fee. Membership requires payment (whether called "activation fee", "node fee", "mine deposit" or "ecological threshold fee")

Number two, "The Head." The source of income depends mainly on the downside of development rather than the sale of real goods or services

Third, "level pay." Return to domestic service up or down, depending on the level and number of persons below。

With these three criteria in mind, you can compare the projects in which you are involved。

Why is it particularly difficult to identify virtual money transfers

Traditional marketing is somewhat vigilant, but virtual money distribution is more lethal because it has several layers of technology。

(i) Concept bombing. You don't understand

The projecter will take a bunch of strange words out of you: DeFi, Layer2, PoS Consensus, Global Node, Smart Contract Auto-Red... These terms are either a real concept of block chain technology or a purely fictional and often akin to false usage. You can't question it because you don't understand. It's easier to be taken with authority。

Attorney Liu has seen a white paper on a project, Ganda 80 pages, all in English and code screenshots, but the core profit model is translated into Mandarin in one sentence: head pulling, payment of contributions, proportional division of household labour。

(ii) Replace "money" with "money", blurring financial transactions

TRADITIONAL DISTRIBUTIONS RECEIVE RMB DIRECTLY AND CAN BE CONSIDERED ILLEGAL. BUT VIRTUAL MONEY TRANSFERS OFTEN REQUIRE PARTICIPANTS TO BUY USDT FIRST, THEN TO PAY THE "ACTIVATION FEE" WITH USDT, OR TO BUY THE "PLATFORM COIN" ISSUED BY THE PROJECT. THE FUNDS WERE ROUNDED UP, APPARENTLY NOT DIRECTLY, BUT BY THEIR VERY NATURE。

Even more subtle is the fact that the project's "White Paper" will show a limited amount of money and will be able to go to the mainstream exchange in the future, giving participants the illusion that this is an investment. In practice, however, most of these tokens have no real support, and the rise is entirely dependent on new entrants. Once the pull of heads slows down, the currency prices collapse, early openings are made and the rest of the people are left dead。

(iii) "Decentralised" cover

"This is not our company's control, it's smart contracts that are self-executed, and no one can run!" -- that's the most ridiculous thing that lawyer Liu has ever heard。

In fact, the person who wrote the smart contract was the project. The contract may set aside the back door or suspend the withdrawal authority at any time. "Decentreization" is a technical feature that is not a shield for the project party, much less a justification for legalization of distribution。

What are the legal risks associated with virtual currency transfer

Regardless of the name of the project, the legal consequences for the participants are very serious once they are identified as marketing activities。

(i) Organizer, leader directly

According to one of article 224 of the Criminal Code and the corresponding judicial interpretation, the threshold for the offence of organizing, directing and distributing activities is not high. As long as you are an organizer or leader (e.g. project sponsor, main pusher, regional "node") and are involved in the distribution of a cumulative number of persons over 30 and above level 3, you may be guilty of an offence and face imprisonment for up to five years or more。

In the money circulation case, lawyer Liu has met with a number of people who feel that they are "general participants" in the promotion. As a result, dozens of downlines have been developed on the ground, identified as "leaders" and convicted for organizing, leading and distributing activities。

(ii) Ordinary participants, where non-criminal liability does not amount to no risk

In the case of ordinary participants, criminal responsibility is generally not pursued, but it is also faced with two major practical shocks:

First, administrative sanctions. Under the Prohibition of Marketing Ordinance, participation in a marketing activity is punishable by a fine not exceeding 2000 yuan。

Secondly, the loss is self-supporting. A more realistic and painful point: according to our laws and judicial practice, property damage resulting from participation in virtual currency-related distribution activities is generally considered illegal and not protected by civil law. That is to say, the $20,000 you've paid for the activation fee, which, if the project crashes, you want to recover through the court, is largely hopeless。

(iii) Helping propagandists: watch out for "helping crime"

Some people would say I was just helping to relay it in the circle of friends

Not necessarily. If you are aware that the other party is engaged in distributional activities through the Internet, you can also provide assistance in the form of publicity, diversion, etc., which, in serious cases, may be linked to the offence of facilitating information-related cybercrime (commonly known as "trust crime". In current judicial practice, the scope of the crime of complicity is constantly being expanded。

I'll teach you four steps to identify virtual money sales

Having said so many risks, counsel Liu came to draw up an honest judgment:

Step one: look at the conditions of entry. Does membership require the purchase of “qualification” or any form of payment? If so, be vigilant

Step two: Look at the source of profit. Do you derive your income from the real gains generated by the project itself (e.g. real technical services, real sales of goods) or from commission, mainly from the downside of development? In the latter case, the marketing characteristics are clear

Step 3: Look at the hierarchy. Does the project have a clear line-down relationship and is it paid back to domestic workers according to a hierarchy? The more complex the hierarchy, the more careful it is

Step four: Search the company's principals. Any formal block chain project should have an identifiable corporate entity, a verifiable team background, and verifiable technical codes (e.g. open source contracts). If the project's designer fails and the white paper is full of company information, it can largely be directly excluded。

Counsel's advice

In the face of the proliferation of virtual money distribution projects, the author provides the following recommendations:

First of all, no pie will fall from the sky. (a) The combination of "static waiting for return and dynamic head pull" is a classic template for distribution, not related to the concept of packaging, not to the use of non-use block chains

Second, "Enter the circle is the advantage" is a hypocritical proposition. Marketing is essentially a fund game where people who enter late are the pick-up guy. Your "preliminary advantage" today is based on the loss of millions of people later

Thirdly, if there is doubt, stop. If you are disturbed by the fact that you are involved in the project, counsel suggests that you do not take a "wait and see" mentality, because when you withdraw at the last minute, you often do not get anything back, and even take legal responsibility for the development of the bottom line

Fourthly, voluntary reporting protects oneself. Under our laws, citizens have the right to report to the Market Supervision Authority or to public security organs for distribution activities. The sooner the report is made, the less likely it will be to reduce both its own losses and the likelihood of joint and several liability in marketing activities

In the world of currency rings, real projects are based on technology and products, not on "headed"; real investment is based on value, not on drums. All the projects that require you to pull people and make money on their heads, no matter how beautiful web3 is, are the same marketing logic。

Recognizing this is the first step to keeping your wallet。