Which companies should not be approached by workers who are new to Web3? | Lawyer Mankiws Legal Education

With the overall economic downturn, layoffs at major Internet companies are no longer news. Job opportunities in the traditional Internet industry are also decreasing. More and more traditional Internet practitioners are beginning to consider changing tracks and working in Web3.

*Recruitment information for some Web3 projects

When they search for relevant information, similar recruitment information emerges in an endless stream. Generally speaking, these positions have good salaries and flexible working hours, and they do seem to be good choices for employment. However, attorney Mankiw would like to remind new workers who are not familiar with Web3 that the Web3 industry has many tracks and they need to be cautious when choosing to enter the industry. There are some tracks and companies that domestic practitioners should never touch.

A red line: the issuance and fundraising of virtual currencies

Since the Peoples Bank of China and seven other departments jointly issued the Notice on Preventing the Risks of Token Issuance and Financing in September 2017, the issuance and fundraising of virtual currencies in China has been clearly defined as unauthorized illegal public financing. In September 2021, the Peoples Bank of China, the Supreme Peoples Court and ten other departments jointly issued the Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation, which further supplemented and strengthened this view. Since 2017, there have been more than a hundred actual criminal cases of varying sizes in China, with the relevant charges involving illegal absorption of public deposits or fund-raising fraud.

The most famous one is of course the Light Cone Coin issued by Tianyi Jiahe from 2017 to 2018. At the time of issuance, tens of thousands of people held the coin. In the end, the relevant personnel were imprisoned and convicted of fund-raising fraud. Earlier, there was the Dasheng Coin issued by Guozheng Company in China from 2016 to 2017, which was also convicted of fund-raising fraud. Therefore, for new practitioners who are new to Web3, the first thing to be aware of is this red line. The entire currency circle has already reached a consensus on this. The formal new currency project party will also specifically exclude Chinese users and the RMB as a legal currency during the ICO (Initial Coin Offering, the first token issuance, which originated from the IPO of the securities industry). When choosing a job as a domestic practitioner, if you find that the employers business may involve the issuance of domestic virtual currency, you should have enough legal awareness and make a reasonable choice.

High risk: Exchange business

According to the Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation jointly issued by the Peoples Bank of China, the Supreme Peoples Court and other ten departments in September 2021, the business of virtual currency exchanges was officially declared as illegal financial activities, including the exchange of legal currency for virtual currency, and the exchange of virtual currencies. It was also around the time of this regulation that exchanges in China were shut down one after another.

At that time, the regulatory authorities of the central bank specifically interviewed the exchanges that were still operating in China at that time, including Huobi, Binance, OKX, etc. These platforms reported their own plans to shut down their domestic businesses and eventually migrated all of them. Only a very small number of small exchanges that were scams and did not follow legal changes, such as the so-called Aston Exchange and ICC Investment Platform, were eventually convicted of fraud. Now, although major exchanges are operating overseas with licenses and have completed exchange compliance, there are also many developing exchanges that do not have such compliance awareness. When new practitioners notice that the employers business involves exchange business in China, they should be vigilant and aware of the legal risks involved.

Be extremely vigilant: Cryptocurrency mining

Unlike the above two risks, the use of mining machines for mining does not involve various criminal risks in my countrys financial supervision. However, in China, mining itself is suspected of violating the Energy Conservation Law and may face fines and forced closures from relevant agencies. In fact, many mining farms in China have long been closed under legal control. In the early days, there was a lot of hydropower in Sichuan, so the electricity price was cheap. A considerable number of large-scale mining farms were once established, and some people even acquired small hydropower stations to supply electricity to their own mining farms. Now it has become a thing of the past. Therefore, there are no virtual currency mining farms that can be operated on a large scale in China, but some criminals have set their sights on this concept. At present, there have been many cases of pyramid schemes with the concept of mining machines as the core in China. Therefore, when new Web3 practitioners notice that their employers are conducting mining business in China, they should be alert in time, find out the employers real business, and avoid being involved in unwarranted disasters.

Be careful to identify: Don’t get involved in “money laundering” crimes

Unlike the first three items that can be concluded with a little attention, for new Web3 practitioners, it may be difficult to make an accurate judgment before joining the job whether the employers business involves money laundering crimes, but it is precisely because of this that they must be more careful in identifying. At present, in countries around the world, many Web3 businesses involve blockchain technology with excellent decentralized effects, and there are endless cases of money laundering crimes using Web3. In 2023, Binance, the worlds largest virtual currency exchange, has more than 60,000 cases with judicial institutions in various countries, most of which are related to the flow of criminal proceeds and money laundering crimes. Whether before or after actual employment, when you have questions about related businesses, it is the right choice to promptly ask people who can provide accurate opinions.

As early as the beginning of 2023, Mankun Law Firm wrote about the common ways of using virtual currency to launder money. The article points out the process of money laundering using virtual currency. It is recommended that new Web3 practitioners should be more vigilant once they find that their business model conforms to this type of routine. It is better to be safe than sorry.

Attorney Mankiws Summary

When new Web3 practitioners apply for various Web3 positions, in addition to being concerned about salary and rest days like traditional workers, they should also pay attention to the actual business areas of the employers. Of course, the Web3 field is changing with each passing day, and new tracks and gameplay are often designed. If you are not a senior participant, it may be difficult to make a judgment. When you cannot judge whether the relevant job position is reliable, it is the awareness of every Web3 worker to consult people who understand the industry in time to protect yourself.

This article is sourced from the internet: Which companies should not be approached by workers who are new to Web3? | Lawyer Mankiws Legal Education

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