How Web3 Technology Developers Can Avoid Criminal Risks of Pyramid Schemes

In recent years, with the vigorous development of the Web3 industry, more and more programmers and smart contract developers are participating in various blockchain projects. However, some projects that claim to be "blockchain incentives" or "GameFi rewards" may actually involve multi-level marketing mechanisms and carry legal risks.

According to recent publicly available judicial cases, even if technical personnel did not directly participate in promotion and publicity, they may still be recognized as accomplices in pyramid schemes if they undertook key technical development work. Some programmers were ultimately judged to be personnel who "played a key role in pyramid scheme activities" due to designing Token models or deploying layered reward contracts.

In this case, it is necessary for Web3 technology practitioners to remain vigilant and understand the potential legal risks. This article will discuss the following questions:

1. What technical actions may be considered as accomplices in pyramid schemes?
2. How to determine if a project has a risk of pyramid schemes?
3. How should technical personnel delineate responsibilities in the project?
4. How should one respond when encountering suspicious projects?

Criteria for Judging Involvement of Technical Personnel

In virtual currency pyramid scheme cases, judicial authorities determine whether someone constitutes an accomplice in the pyramid scheme mainly by looking at two points: first, whether substantial support has been provided to the pyramid scheme model through technical means, and second, whether there is subjective awareness.

According to relevant judicial interpretations, not only the project initiators and operators but also anyone who plays a key role in "the implementation of pyramid selling activities, the expansion of pyramid selling organizations, etc." may be identified as organizers or leaders. This provides a legal basis for holding technical personnel criminally responsible.

Key Elements of an Effective Defense

1. Are you aware that the project constitutes a pyramid scheme? If you only completed a one-time development as required and did not engage with the overall operational logic of the project, you can argue that there was a lack of subjective intent.

2. Is there any intention to communicate? If you did not participate in the project architecture design and system formulation, and there were no joint development and promotion activities, you can deny the formation of a conspiratorial connection with the platform party.

3. Whether to obtain project benefits. If you do not hold platform tokens, have not received rebates, and do not hold special identities such as consultant, you may strive for a lighter punishment based on this.

4. Does the developed content have neutrality? If only general system functions are developed, rather than specifically designing rebate logic, it may be possible to avoid charges or even prosecution.

Self-Protective Measures for Technicians

1. Identify the characteristics of pyramid schemes in the early stages of the project, such as multi-level commissions and static income.

2. Clarify the technical boundaries and retain evidence such as communication records, contracts, and code deliveries.

3. Avoid engaging in marginal behaviors such as project operation and promotion.

4. Identify funding risks and cut losses in a timely manner, and secure relevant evidence.

5. Strictly delineate responsibilities in cooperation and avoid involvement in sensitive areas.

In summary, Web3 developers should enhance their risk awareness, clarify their roles in project collaborations, and ensure proper evidence retention, which is key to reducing legal risks. They should also closely monitor changes in industry policies and promptly adjust their compliance strategies.