This article will combine typical crypto project cases to systematically analyze the common criminal risk exposure points and judicial identification logic in Web3 positions from the perspective of technical developers, focusing on the following five issues
Author: Lawyer Shao Shiwei
In recent years, with the rapid development of the Web3 industry, more and more programmers, smart contract developers, and outsourced technical teams have participated in system construction, contract deployment, and platform maintenance of crypto projects as blockchain engineers and project consultants. However, many projects operating under names like "blockchain incentives", "token rebates", "GameFi game earnings", and "decentralized node rewards" are essentially running pyramid schemes with mechanisms such as "hierarchical promotion", "referral commissions", and "locked token release", carrying legal risks of being defined as organizing and leading pyramid schemes.
From publicly available judicial precedents in recent years, in multiple virtual currency pyramid scheme cases, programmers and contract developers, although not involved in promotion, publicity, or fund operations, were ultimately determined to have played a key role in implementing pyramid schemes by developing rebate logic, designing Token models, or deploying smart contracts with hierarchical reward structures, and were thus treated as accomplices or accessories, with some even categorized as "organizers and leaders".
In view of this, this article will combine typical crypto project cases to systematically analyze the common criminal risk exposure points and judicial identification logic in Web3 positions from the perspective of technical developers, focusing on the following five key issues:
• What behaviors might programmers be deemed accomplices in pyramid schemes?
• Do technical outsourcing parties constitute accomplices in assisting pyramid scheme organizations?
• How are CTOs and technical partners defined as "organizers" in judicial proceedings?
• How can technical participants seek innocence, non-prosecution, or reduced charges?
• How can developers proactively identify risks, define technical boundaries, and establish legal defenses?
Finally, Lawyer Shao, drawing from practical experience, provides actionable risk prevention recommendations for Web3 technical participants, helping technical personnel enhance their ability to identify sensitive signals and clarify behavioral boundaries during project development, avoiding unintentional involvement in criminal cases due to unclear role positioning or misjudgment.
I Author: Lawyer Shao Shiwei
1. Typical Judicial Cases of Web3 Projects Involving Pyramid Schemes
In recent years, the number of crypto projects being defined as pyramid scheme crimes due to suspected "referral rebates" and "fund platform operations" has continued to increase. In these cases, programmers, technical outsourcing teams, and contract developers often become the focus of judicial scrutiny. After all, whether a scheme constitutes a pyramid scheme often depends on the platform's business structure and underlying technical logic.
For example, in the PlusToken Case, the technical team developed a "smart dog arbitrage system" that was used in the platform's external promotion of "over 10% monthly static income, with up to 60% potential earnings", becoming a key selling point to attract investors. The court ultimately determined that this function constituted a technical implementation tool for the pyramid scheme structure, and multiple involved parties were sentenced to 2 to 11 years in prison for organizing and leading a pyramid scheme.
In the EOS Ecosystem Platform Case, defendant Chen and others jointly established an EOS ecosystem platform pyramid scheme organization, offering digital currency value-added services, developing members through "token appreciation" and "static income + dynamic commission" methods, constructing a multi-level team structure, and using EOS coins as investment and rebate basis. The platform was defined as a pyramid scheme crime, and multiple employees were deemed principal or accessory offenders for participating in the organization's daily operations and system maintenance.
Additionally, in chain games, Non-Fungible Token digital collections, and token issuance projects, if developers design contract modules containing logics like "hierarchical commissions", "token release", and "node rewards", they are also likely to be included by judicial authorities as technical supporters of the pyramid scheme structure and become targets of prosecution.
From these cases, it is clear that whether technical personnel bear criminal responsibility depends on whether they substantially participated in building, deploying, or maintaining the platform's pyramid scheme structure.
2. Three Typical Identities of Technical Personnel Subject to Accountability
Based on the judgment of multiple virtual currency pyramid scheme cases in recent years, technical participants subject to accountability can be roughly divided into the following three categories. Judicial authorities typically make comprehensive judgments by considering their specific role in the project, their understanding of the project's business model, and whether their technical actions provided key support for establishing and operating the pyramid scheme structure. The following will elaborate on each category.
1. Project Technical Director / CTO / Technical Partner [High Risk]
These personnel are usually at the core of the project team, with deep involvement and comprehensive information access. In blockchain games, virtual wallets, and mining machine rental projects, technical partners often directly responsible for platform architecture construction, economic model design, and commission system deployment.
Although some technical directors did not actually participate in promotion, their technical actions directly built the operational foundation of the pyramid scheme structure. Judicial authorities typically hold them accountable as "organizers," "leaders," or "key participants" when making qualifications.
These technical roles are viewed as "core builders" of the pyramid scheme model, and judicial authorities often categorize them as organizers, leaders, or key accomplices.
2. Technical Outsourcing Companies / Freelance Developers [High Dispute Area]
In crypto/Web3 projects, outsourcing teams or independent developers completing system development through contractual cooperation are very common. Although these individuals are not platform members and may not hold shares or participate in operations, the content they deliver often involves invitation structures, multi-level commission algorithms, and promotion path designs.
Judicial authorities typically focus on the following aspects when determining whether a crime is committed:
- Whether they understand the project uses a multi-level commission model;
- Whether they are aware that the incentive logic has pyramid scheme characteristics;
- Whether they continue to provide functional development or online maintenance support while knowingly aware of the risks.
If technical personnel can prove they only delivered according to the contract, did not participate in business model decisions, and did not receive tokens or commissions beyond the contract price, they still have a chance to argue against criminal charges or seek lighter punishment.
3. Smart Contract Development / Economic Model Consultant [Larger Defense Space]
In some Web3 projects during Token issuance or economic model design, projects often introduce external technical personnel as consultants or contract developers to assist in token structure design, profit-sharing logic construction and deployment. Although these technical actions occur in the early project stage, once the contract embeds "multi-level commission," "dynamic income," or "locked token release" mechanisms characteristic of pyramid schemes, their impact will continue to be embedded in the platform's underlying structure.
From the judicial authority's perspective, even if such technical personnel do not participate in daily promotion and maintenance, if the technical logic they write is used to attract investors and promote project expansion, their actions may still be defined as "assisting in constructing a pyramid scheme structure," potentially facing accomplice or accessory charges.
However, in practice, if the following points are met, there is still significant defense space:
- The developed contract uses generic logic modules, not specific to pyramid schemes;
- Did not participate in platform launch, promotion, or continuous maintenance;
- No token holdings, did not receive commissions, and did not serve as advisors or partners.
Judicial authorities are more focused on whether there is "subjective knowledge + objective behavior". If the development process itself is clearly separated from the project's business model, one can argue for innocence or non-prosecution by providing evidence of development boundaries.
[The rest of the document follows the same translation approach]In this Part Two, we will further analyze how judicial authorities determine the boundaries of "technical participation" when establishing guilt, and how technical personnel can, in the face of criminal liability risks, combine their own roles and evidence chains to seek defense spaces for innocence, reduced charges, or even non-prosecution.
