How can Web3 technology developers avoid the risks of being accomplices in pyramid schemes?

In recent years, the Web3 industry has rapidly developed, with an increasing number of programmers, smart contract developers, and technical teams participating in the system development and platform maintenance of cryptocurrency projects as on-chain engineers or project consultants. However, some projects that claim to offer "blockchain incentives," "GameFi rewards," and the like actually operate pyramid promotion schemes, lock-up releases, and other multi-level marketing mechanisms, posing legal risks of being classified as organizing or leading pyramid scheme activities.

From recent publicly available judicial cases, in multiple virtual currency pyramid scheme cases, even if programmers and contract developers did not directly participate in promotion or fund operations, they were ultimately identified as individuals who "played a key role in the implementation of the pyramid scheme" due to their involvement in the development of commission logic, token model design, or deployment of smart contracts with layered reward structures, and were treated as accomplices or accessories, with some even categorized as "organizers or leaders."

In light of this, this article will systematically analyze the criminal risk exposure points and judicial qualification logic in Web3 positions from the perspective of technology developers, focusing on the following questions:

• What actions by programmers might be identified as being accomplices to pyramid schemes?
• Does the technical outsourcing party constitute an accomplice to the pyramid scheme organization?
• How are the CTO and technical partners defined as "organizers"?
• How can technical participants seek acquittal, non-prosecution, or reduction of conviction level?
• How can developers identify risks in advance, delineate technical boundaries, and build legal defenses?

Criteria for Holding Technical Personnel Accountable

In cases of virtual currency pyramid schemes, even if technical personnel do not directly participate in promoting or recruiting people or raising funds, they may still be held accountable for organizing and leading pyramid scheme activities. The key to determining whether it constitutes a co-offender in a pyramid scheme lies in whether substantial support is provided for the establishment and operation of the pyramid scheme model through technical means, as well as whether there is subjective awareness and intent to contact.

According to relevant judicial interpretations, organizers and leaders are not limited to initiators or operators, but also include "those who play a key role in the implementation of pyramid schemes, the establishment and expansion of pyramid organizations." This has become the legal basis for determining the criminal liability of technical personnel.

Core Elements of an Effective Defense

1. Is it "knowingly" that the project constitutes a pyramid scheme?

It is necessary to examine whether the technical personnel are aware that the project has characteristics of a pyramid scheme. If they only completed a one-time delivery according to the functional description, without actually engaging with or understanding the overall operational logic of the project, and did not participate in discussions about the rebate system, it would help in arguing "lack of subjective intent".

2. Is there any "meaning communication" or joint collaborative behavior?

If there has been no participation in the overall architectural design of the project, no involvement in the formulation of institutional plans, and no joint development actions, promotional collusion, or collaborative launch, one can claim that there is no intent connection formed with the platform party, thus excluding the establishment of joint crime.

3. Whether to obtain project benefits, whether to have affiliated identity

If you do not hold platform tokens, have not received rebate commissions, have not enjoyed node identity rewards, and have not been given special identities such as "consultant" or "partner", it indicates that you have not obtained illegal gains within a pyramid scheme structure, and you can seek to argue for related mitigating circumstances based on this.

4. Does the content of technological development possess neutral attributes?

If the developed content is a general system ( such as a front-end interface or a regular database management system ), rather than specifically designed core functions like "hierarchical commission, team commission", there may be a chance for no guilt or even not being prosecuted.

Practical Legal Advice

1. Identify "three-tier commission + static income" and other pyramid scheme characteristics during the early development stage.

During the initial phase of project integration, technical personnel should focus on identifying whether the developed functions serve the incentive structure of "referral rewards." The following types of factors are often high-risk signals for identifying a pyramid scheme:

• The reward level exceeds three levels, forming a clear hierarchical relationship.
• User earnings come from the expansion of downlines, rather than from real goods or service transactions;
• There are mechanisms such as "recommended code to unlock earnings" and "referral to unlock withdrawals";
• Claims such as "monthly earnings of over 10%" and "arbitrage profits daily".

2. Clearly define technical boundaries and actively leave traces to clarify responsibility.

• Retain complete communication records, especially regarding the explanation of one's own role boundaries;
• Clearly specify the scope of services in the contract to avoid vague statements.
• Keep records of source code delivery and documentation to prove that the development content does not involve key modules related to pyramid schemes;
• Project payment records should be labeled as technical service fees to avoid being linked to project profit sharing and rebates.

3. Stay away from "marginal behavior" to avoid being mistakenly recognized as participating in pyramid schemes.

Avoid the following behaviors:

• Register a platform account to participate in "dividends" and "airdrops", or assist in demonstrating the usage process;
• Appears in the project's white paper, promotional pages, and is titled as "Technical Advisor" "Core Partner" and other titles;
• Be added to the internal testing group or core operation group to assist in answering questions and providing strategic advice;
• Receive platform tokens, node distributions, commission rewards, and other "benefits" that exceed the development contract.

4. Discover signs of a Ponzi scheme, take timely losses and secure evidence.

Once there are characteristics such as withdrawal restrictions, extended lock-up periods, or the need to recruit others to unlock profits, or accompanied by abnormal phenomena such as the disappearance of operational personnel, closure of the official website, or dissolution of the community, cooperation should be immediately terminated, and relevant technical delivery records, chat communications, payment information, contracts, and agreements should be properly preserved.

In the current environment where the compliance boundaries of Web3 projects are blurred and regulation continues to tighten, having a preliminary awareness of criminal responsibility, clearly defining one's own responsibilities, and ensuring proper evidence retention during the collaboration process are key for technical personnel to reduce the risk of involvement in legal cases and to uphold the legal bottom line.