Web3 Project Compliance Assessment: How Developers Can Identify Potential Legal Risks

As a technical practitioner in the Web3 field, understanding the compliance of a project is crucial. This article will explore how to identify potential legal risks in Web3 projects from a technical perspective, helping developers avoid high-risk patterns that may violate criminal law in the early stages of the project.

Four Common High-Risk Web3 Project Models

1. Gambling-related projects

Typical features: Recharge entrance + Random gameplay + Withdrawable path

Key judgment points:

• Is there a virtual currency deposit recharge?
• Is there a design for uncertain gameplay such as lotteries and quizzes?
• Are there token exchange and withdrawal channels?

When a project possesses these three points simultaneously, even if the developer is only responsible for certain functional modules, they may face legal risks due to their involvement in building a "gambling loop."

2. Pyramid scheme projects

Typical features: User payment + Invitation rebate + Multi-level rebate chain

Key Judgment Points:

• Do you need to purchase coins/top up to participate?
• Is there a mechanism for inviting others to receive rewards?
• Is there a multi-level distribution structure?
• Does the project's profitability mainly rely on personnel development rather than the actual product?

If the incentive model is built around developing downlines and multi-level commissions, developers need to be particularly cautious when participating in the construction of related systems.

3. Involvement in illegal fundraising projects

Typical characteristics: public fundraising + promised returns + no financial qualifications

Key judgment point:

• Is it fundraising for unspecified objects?
• Is a fixed return promised?
• Is there a liquidity pool or token exchange mechanism?

If developers participate in the design of token issuance, points redemption, and other modules, even if they are not involved in operations, they may be held accountable for providing key technical support.

4. Involvement in illegal business projects

Typical features: cryptocurrency matching + over-the-counter exchange + fiat deposit and withdrawal channels

Key Judgment Points:

• Does it provide deposit and withdrawal services between virtual currencies and fiat currencies?
• Is there an OTC trading module?
• Does it involve cross-border fund matching?
• Is foreign exchange trading conducted without permission?

Even if the platform does not directly hold users' funds, as long as a relevant matching system is established, the technical party may also be deemed an accomplice.

How to Effectively Avoid Legal Risks

As a developer, you should: before participating in a Web3 project,

1. Understand the overall model of the project, be wary of the four types of high-risk structures mentioned above.

2. Clarify the logic of capital flow and token issuance

3. Clearly state in the agreement that you only provide technical services and do not bear operational responsibilities.

4. Keep records of discussions with project parties regarding Compliance.

5. Core technical personnel should proactively understand the project's Compliance and timely raise questions and suggestions.

Conclusion

In the Web3 industry, technical developers often occupy a core position in projects. Having basic legal risk identification skills is not only a necessity for self-protection but also key to promoting healthy industry development. Truly outstanding developers should be both proficient in technology and understand compliance boundaries to become the most valuable builders in the Web3 ecosystem.