Legal Risks for Web3 Practitioners: Reflections Triggered by a Cross-Province Arrest Case

Recently, a technical employee of a digital wallet company was arrested by the police in another province without any warning. The employee was accused of "aiding and abetting information network criminal activities" due to the fact that some of the merchant partners on the wallet platform are suspected of operating online casinos. This incident has sparked widespread discussion about the legal risks faced by Web3 practitioners.

Legal Risks of Technical Positions

Many technicians believe that they only deliver code on demand, and how it is used is the client's concern. However, this viewpoint stems from a misunderstanding of the principle of "technological neutrality". In the current judicial practice in our country, the key to constituting a crime is not whether one personally committed the illegal act, but whether the provided "technical services" had a "substantial assisting" effect on upstream crimes.

If technology objectively lowers the threshold for criminal activities, such as providing anonymous transfers, coin mixing functions, or means to evade KYC, it will no longer be regarded as "neutral," but rather as "assisting."

Risk Exposure of Small Platform Employees

Compared to large virtual asset trading platforms, small Web3 projects that lack compliance mechanisms are more likely to become targets of law enforcement agencies. The reasons include:

1. Small platforms often have personnel located domestically, making law enforcement actions easier.
2. Small platforms often lack compliance defenses such as KYC real-name authentication and AML anti-money laundering.
3. Small platforms often lack enforcement docking systems and response mechanisms.

Potential Legal Risks of Remote High-Paying Jobs

The "remote work + high salary" model commonly seen in the Web3 industry is attractive, but it also carries legal risks. Some high-risk signals include:

• Project registration location is vague, salaries are settled in virtual currency.
• No written labor contract, communication only through instant messaging tools.
• Lack of compliance audits, KYC processes, or anti-money laundering systems

Self-Protection Recommendations for Web3 Technicians

1. Project Evaluation:

   • Confirm that the project is registered in a regulated jurisdiction.
   • Check if there are third-party code audits or security audits
   • Confirm whether KYC, AML and other systems are in place
   • Verify whether the project has publicly disclosed basic information

2. Precautions in the workplace:

   • Stay away from high-risk functional module development
   • Retain communication records of suspicious instructions or pressure

3. Key Points at the Time of Contract Signing:

   • Clearly does not directly contact user fund accounts
   • Do not process users' personal sensitive information
   • Not participating in marketing activities

4. Seek professional legal advice and conduct a "project compliance check"

Conclusion

Web3 practitioners should recognize that law enforcement often focuses on the actual use of technological tools and their social impact when determining the boundaries between technology and law. Maintaining awareness of legal risks, carefully selecting projects, and seeking professional legal advice when necessary are fundamental qualities that Web3 technology practitioners should possess.