Wie lassen sich persönliche Rechtsrisiken vermeiden, wenn man für Blockchain-Projekte im Ausland arbeitet?

Written by: Liu Honglin, Mankiw LLP

A few days ago, Lawyer Liu Honglin of Mankiw Law Firm received an online inquiry from a client. This client previously worked for an overseas project that was preparing to issue a coin. The project was about to be listed on an exchange (I didn鈥檛 ask which project it was). However, considering that the market has been cold recently, it is a bit like a bear market. This friend was very worried that the coin price would fall short of expectations after the project was listed on the exchange. What should he do if the users in the community come to make trouble?

More importantly, this friend has been in China for a long time and has no intention of leaving the embrace of his motherland. If someone calls the police in China to defend their rights, will I, as a remote worker, bear legal responsibility for this?

Such worries and concerns are actually very common in the cryptocurrency circle. Every time Lawyer Honglin participates in an offline event, friends will come to discuss similar issues. Many of them are young people who have just graduated from college. After all, it is not easy to find a job now, and many blockchain projects offer good salaries and benefits, and the working hours and location of distributed offices are more flexible.

In this article, Lawyer Honglin will talk to you about this topic. Of course, the relevant questions and answers have been anonymized and are no longer limited to the scope of this client consultation.

Legal risk analysis of the project itself: the source of risk

Before discussing legal risks, we must first conduct as comprehensive a legal analysis of the project as possible. After all, legal risks come from business, which is the source of all wealth and risks.

First, we need to confirm where the project is registered. If the projects company is registered in a country or region that has a relatively relaxed attitude towards virtual currencies, then the operation of the project may not pose a direct legal risk. However, if the project is registered in a country that has a strict regulatory attitude towards virtual currencies, then the legal risk will increase significantly, especially for the trading and issuance of virtual currencies. This is why blockchain project parties with a little risk prevention awareness will deliberately stay away from the United States regardless of the companys registration place or the fundraising target.

Whether the projects marketing users involve mainland China is the core issue of legal risk assessment. If the projects marketing is aimed at mainland Chinese users, or even allows Chinese users to participate in investment or transactions, then it may violate relevant Chinese policies and laws and regulations. China currently prohibits ICO (initial coin offering) and virtual currency transactions, so any token sales and marketing activities targeting Chinese users may be deemed illegal.

In addition, whether the business model of the virtual currency project involves illegal fundraising, pyramid schemes and other illegal activities is also a key point in analyzing legal risks. If the sales model of the project includes characteristics suspected of pyramid schemes such as recruiting people and rebates, or its token sales are essentially illegal fundraising, then the project party and related participants may face criminal risks. If the project itself does not have any illegal issues, then the legal risks for the staff involved in the project will naturally be much smaller.

Legal Risk Analysis for Remote Workers: With Greater Responsibilities Come Greater Risks

Returning to the micro level, the legal risks we face for individual partners who provide specific work and business services to overseas project parties can be analyzed from two aspects.

First of all, there is nothing wrong with providing remote services to overseas companies or project parties. Whether it is a Web3 project or other traditional Internet projects, as long as the other partys business is legal, the remote support of operators does not constitute a direct legal risk. Of course, this premise means that the project must comply with the laws and regulations of mainland China. The most typical example is that if the other party is an overseas casino project, then in mainland China, it is illegal for you to provide services to it, whether it is technical expenditure or marketing promotion services. Therefore, as a friend applying for an overseas project party, you must first confirm whether the project partys business is legal and compliant, and avoid providing support for projects that may have legal risks.

Secondly, if the project itself has legal or compliance risks, the legal risk of the staff mainly depends on their degree of participation in the project. There is a saying in the movie Spider-Man that the greater the ability, the greater the responsibility. This is the same in any industry and any company. Generally speaking, the core management or executives involved in the project will bear greater legal responsibilities. In particular, if you, as an executive, participate in key decisions of the project, such as sensitive links such as fund operation and token issuance, then once the project is deemed illegal, your legal risk will increase significantly. On the other hand, if you are just an ordinary operation staff in the middle and back-end, responsible for daily operation strategies, and not involved in core decision-making and fund management, then your legal risk is relatively low. When judging responsibility, the law usually considers your role and actual participation in the project. Therefore, customers need to clarify their specific responsibilities in the project and try to avoid being involved in core sensitive decisions, especially those related to high-risk areas such as token issuance and fund management.

Legal treatment of community objections and police rights protection: difficult, but precautions are needed

Many project staff members in charge of the Chinese community are very worried that they will appear in front of mainland Chinese users every day with their real names. If community users are dissatisfied one day, or even call the police to protect their rights in China, will their personal safety be affected? We need to make it clear that the transaction of virtual currency is a gray area in China. The policy clearly prohibits ICO and token transactions, but China obviously does not deny the development of blockchain technology companies and formal companies that comply with the regulatory policies of the countries and regions where the projects are located. To be more realistic, the public security cannot tell whether a project is formal or not. So usually when you say that you have lost money or been cheated in a blockchain project, the first reaction of the public security is: Look, I have been sending anti-fraud propaganda every day, and you are still not paying attention. The country does not allow virtual currency, so dont look for the government if you lose money. Therefore, if community users call the police, whether the public security will file a case is unknown. Unless the project is suspected of serious illegal acts such as illegal fundraising or fraud, the possibility of filing a case is not high.

However, this does not mean that users will not take other means of pressure. In addition to calling the police, community users may file complaints through industrial and commercial, market supervision bureaus, financial regulatory departments and other institutions. Such complaints often focus on whether the project has violated market supervision and financial laws, such as false propaganda, illegal fundraising and other issues. In particular, if the project involves users from mainland China, users may use the domestic legal framework to try to protect their rights. Although such complaints may not directly lead to criminal cases, they will cause regulatory troubles for the project and even affect its operations. For the project party, the intervention of industrial and commercial and financial supervision may lead to further legal risks and administrative penalties.

In addition, Lawyer Honglin would like to remind everyone that community users may also violate the law in the process of defending their rights or exerting pressure. For example, some users may spread the personal information of project staff on public platforms in order to exert pressure, which involves infringement of privacy rights. Or malicious attacks in posts and social media to discredit the reputation of project parties and staff may also constitute defamation. These actions seem to be for the purpose of defending rights, but they are also illegal in nature. If the project staff finds these situations, they can safeguard their legitimate rights and interests through legal channels and take timely measures to deal with false statements or violations of privacy.

Therefore, the project team needs to be prepared for possible community objections and rights protection actions. On the one hand, evaluate the compliance of the project itself to ensure that the operation does not cross the legal red line; on the other hand, always pay attention to the reactions of community users, especially when users take extreme measures, and use legal means to protect themselves and prevent unnecessary damage caused by the illegal behavior of others.

Three tips for self-protection during remote work: clarify boundaries, preserve evidence, and stay away from sensitive operations

Understand and assess project compliance

First of all, as a friend who is about to join the company, you need to conduct as comprehensive a risk assessment as possible on the project you are involved in. This includes understanding whether the projects place of registration belongs to a virtual currency-friendly jurisdiction, especially the legal provisions on the issuance of virtual currencies and tokens. Secondly, clarify the marketing targets of the project, especially whether it is aimed at users in mainland China. If the project touches Chinese users, it is recommended that you ask the project party to make appropriate adjustments to the marketing behavior to avoid touching the legal red line of virtual currency transactions in mainland China. In addition, clarify the business model of the project and carefully examine whether there are signs of suspected illegal fundraising, pyramid schemes and other illegal activities. If there are doubts about the compliance of the project, it is recommended that the project party hire a professional legal advisor to evaluate the compliance of the project.

Ensure clear lines of responsibility and preserve evidence

As a project staff member, you should clarify the boundaries of your responsibilities and try to avoid participating in sensitive work such as fund management or token distribution. You can confirm your specific scope of responsibilities with the project party in writing (such as emails, work task documents), ensure that each work content is clearly confirmed, and avoid being implicated due to unclear responsibilities in the event of subsequent disputes. If the project party asks you to participate in financial or token issuance-related work, it is recommended to explicitly refuse and keep communication records to prove that you are not involved in decision-making in sensitive links. In addition, it is recommended to regularly back up project-related work materials, especially documents and communication records involving operational strategies, marketing promotion, etc., to ensure that there is evidence to prove your scope of work responsibilities and operating specifications in the event of a dispute.

If a dispute occurs, seek legal help in a timely manner

If there are objections from community users after the project goes online, or if there is a police report for rights protection, it is recommended to communicate with a lawyer as soon as possible to assess your legal liability. You can prepare relevant materials in advance, including the projects compliance documents, your work records, communication logs, etc., so that the lawyer can quickly understand the situation and provide effective legal advice. You can also discuss with the lawyer whether preventive measures need to be taken, such as whether you should withdraw from the project in advance if there are compliance risks in the operation of the project party, or take the initiative to clarify your role before the dispute breaks out to ensure that your degree of participation and scope of responsibility are clearly defined by the law. In addition, if community users take extreme measures, such as maliciously publishing personal privacy or conducting reputation attacks, it is recommended to take prompt measures under the guidance of a lawyer, including issuing a statement to clarify the facts, or taking legal action to hold the infringer accountable.

Zusammenfassung von Rechtsanwalt Mankiws

Whether you are a new operator or a veteran in the cryptocurrency industry, you should always be highly vigilant about compliance and legal risks when participating in virtual currency projects, especially when targeting the domestic market. It is okay to work remotely for overseas projects, but the premise is that the project itself is legal and compliant, and you have a clear understanding of the boundaries of your responsibilities, stay away from sensitive operations, and keep good work records. When facing community objections or potential legal disputes, seeking the help of professional lawyers in a timely manner can not only protect your rights and interests, but also allow you to gain a firm foothold in this complex market. After all, in the world of surfing Web3, opportunities and risks coexist, and avoiding online and personal safety is the kingly way.

This article is sourced from the internet: How to prevent personal legal risks when working for overseas blockchain projects?

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