What should I pay attention to when joining Web3 Coin Issuing Company?

Source: Lawyer Liu Honglin

At the weekend, a friend searched for blockchain-related legal issues on Zhihu and read several articles shared by Lawyer Honglin in the past. Related articles, I felt that the professionalism was quite good, so I specially made an appointment for a paid consultation with me. In half an hour, I answered some of the questions he was most concerned about. After finishing, I sorted out the questions and found that they are all confusions that practitioners in the currency circle often encounter. I might as well briefly summarize them for the reference of relevant friends.

1. If the company wants to issue coins, are there any legal risks?

China encourages blockchain technology, but China does not welcome virtual currencies. As an individual citizen, investing in and buying virtual currencies is generally a matter of your own return and risk. The state does not encourage it, but it does not deny it. The only thing you need to worry about is whether your bank card or exchange account will be frozen due to the involvement of gray and black assets during the buying and selling process. You must know that in the past two years, the number of domestic crimes of trust has jumped to the second place in the country, and virtual currency players account for the majority.

According to our understanding of China’s virtual currency regulatory policies, there are three things that are clearly not allowed to be done in China: The first is the issuance and fundraising of virtual currencies, that is, What we are talking about is issuing coins. If a company wants to issue coins and list them on an exchange, but your products and services are all for the Chinese market, then it is an obvious illegal act for you to promote the project to Chinese citizens.

The second is that virtual currency mining cannot be done in China, especially the kind of mining that requires a lot of electricity, such as Bitcoin mining. As for whether the DePIN track, which has been hotly speculated recently, will be recognized as virtual currency mining across the board, Lawyer Honglin personally holds a reserved view.

The third one is the virtual currency exchange business. Any promotion and publicity of virtual currency exchanges targeting Chinese citizens is illegal in the country. This point is ignored by many friends who help virtual currency exchanges to promote projects remotely in China. Everyone should pay attention to the risks. It doesn’t mean that there are no risks if you don’t work together. It doesn’t mean that using telegraph for company communication is safe. Still underestimated the ability of China's public security police to investigate and handle cases.

2. If the company does not issue coins, is it okay to sell NFT?

As a neutral technology, NFT itself is not prohibited by law. Whether NFT can be sold depends on the corresponding rights and interests. If you are selling game prop NFTs, membership card NFTs, or avatar NFTs, it will not be a big problem whether it is overseas or in mainland China. For example, the digital assets of the Guangming Membership Card recently issued by the Shanghai Digital Exchange. I personally think it is the NFT of the membership card.

However, it should be noted that NFTs issued and sold in mainland China can only be purchased by users in RMB, not USDT or ETH.

3. There is no written agreement signed with the current company. Salaries are paid in USDT and social security is paid by myself. What are the legal risks?

Many Web3 companies will adopt a distributed office approach, which seems to be more comfortable for friends who have "joined" the company. They can freely go to and from work without punching in, and there is no need to pay wages. With social security and tax deductions, the money you get will obviously be much more than other friends who work honestly in China.

But everything has two sides. From an accounting point of view, the company is actually most welcome to not letting the company help pay social security, deduction of personal income tax, etc., because it can save a lot of money. You know, if the company pays you a salary of 10,000 yuan, the actual cost spent by the company will be There are about 14,000 yuan. Where did the extra 4,000 yuan go? In fact, it is the social security provident fund and other expenses deposited into your personal account. This money is actually hidden income for workers.

Taxes and social security fees are related to your local resident welfare or settlement policies. You may not feel it now, but you will realize the disadvantages of not paying social security provident funds when friends in the currency circle consider buying a car or a house, or getting married, having children, or going to school.

Of course, some friends will find a service provider to pay the payment themselves. But in this case, if the company wants to fire you, then you obviously have no way to be protected by China's labor law. Some time ago, a friend who worked at Web3 was fired by the company without reason while she was pregnant, but did not receive any compensation in the sense of labor law. Workers' rights like this are something that office workers who only take tokens should pay attention to.

4. I have a basic position in the company and am responsible for program development. If something happens to the company, what legal risks will I face?

Generally speaking, the bosses or actual controllers of projects that issue coins in the currency circle will choose to live overseas for a long time, or have obtained overseas status, based on their own criminal risk prevention considerations. , what needs to be guarded against is the criminal legal risks in China.

However, due to operational and labor cost considerations, a large number of employees remain in the mainland.

If the worst happens and the company's projects involve criminal crimes, employees working in China will naturally be implicated. This is particularly evident in Web3 startups in Shanghai and Shenzhen. What often happens is that key employees and management of the company are called in to assist in the investigation, or even detained. Based on the principle that with greater ability comes greater responsibility, usually people above the department head face greater criminal liability or pressure, while grassroots staff face lower risks. Of course, this division of responsibilities is not absolute. , the core still depends on your level of participation and knowledge as a staff member of the company in a specific project.

Previously, a friend who has been working in the currency circle came to consult lawyer Honglin online. Because a project he recently participated in was opened for investigation by the domestic police, he was detained in the detention center for a few days. Out on bail. After he came out, he still planned to find a job in Web3. The reason was simple: the company's salary was high. This friend also said frankly: If I can earn more than a few million in this company, I can live here for a few years. This shocked me.

Written at the end

For practitioners in many industries, criminal risks are likely to be something that they will never encounter in their lifetime. However, in the Web3 industry, the prevention of criminal legal risks has become a necessary knowledge point for the profession. There is no other reason. This industry is too close to money and the financial risks are too high. Therefore, for those who plan to join Web3 companies, or those whose companies want to issue coins, there is no harm in learning more about the legal knowledge related to Chinese virtual currencies. If you are unsure about something, it is necessary to consult a knowledgeable lawyer to sort it out.