Cryptocurrency KOLs should be careful: attracting new users for exchanges may be illegal

On May 24, the Cyberspace Administration of China issued a notice to rectify a number of online financial information accounts and websites. Among them, the most relevant to our Web3 industry is that a number of accounts that promote virtual currency transactions were "closed in accordance with the law and contract."

Named in this notice include Weibo accounts "Huo Ge Chats about Cryptocurrency", "Finance-Xu Yanwen", "Arn-On Coins", Zhihu account "00 Post-Rich Generation", etc. The official determined that they guided users to participate in virtual currency transactions by posting screenshots of earnings and group chat information.

Also mentioned are overseas cryptocurrency trading platforms such as PKEX, WEEX, and HTX - these platforms themselves do not have the legal qualifications to conduct business to the public in mainland China, but there are still some Chinese websites and content accounts that provide them with App download redirection or promotion services, so they are also included in this rectification.

In the past, people may have paid more attention to whether exchanges and project parties have directly promoted or conducted business to mainland users. This time, the link of account content and community operation is dealt with, which is indeed a wake-up call for content creators in the Web3 industry.

From what Lawyer Honglin has come into contact with, there are actually far more accounts listed in the notice that do similar things in the Web3 industry.

Knowledge sharing, but attracting new users

Many friends who create content may not realize that they have touched the policy red line of cryptocurrency regulation in mainland China.

The most typical operation routine is what we often see on Chinese social platforms:

First, post a screenshot of the account income, stating how many times a certain coin has risen in the recent wave of market conditions; add a few sentences of "strategy review" or "on-chain fund analysis" in the middle, and then post a screenshot of the chat record, implying that someone in the group has already followed up and has reaped the dividends; the last point is the familiar words: "Scan the code to join the group", "Add assistant VX", "There is information/internal reference in the group".

On the surface, it seems to be knowledge sharing and market exchange, but the structure is a set of user conversion funnels.

Once you join the group, you will find that the group owner releases some platform information, project analysis and "real-time screenshots of orders" at a fixed time every day. Some people also use labels such as "institutional data", "VIP strategy group" and "community investment research group" to package themselves, saying that they provide professional information services to users, but most of the groups are focused on conversion around a certain platform. Going further, someone will post an invitation code, a registration link, or jump to download the App.

This type of group looks like a community, but in fact it is a traffic monetization channel - and the group owner is the operator in the platform rebate system. The more users trade, the more he gets.

Lawyer Mankiw has previously come across several user complaint cases, and the processes are very similar: users see a well-written content article, click into the community from the official account, and chat about projects, strategies, and simulated trading operations in the group.

After making a little money by following orders in the first few times, users naturally relax their vigilance, and as a result, they suffer frequent losses after large investments. When they want to find someone to ask for clarification, the platform cannot communicate, and the group owner is directly disconnected. In the end, the only thing they can find is the initial article.

Many of these "content entrepreneurship" accounts are actually outsourced personnel of the platform's rebate system. Use content to attract traffic, use the community to complete conversions, and use links to close the chain. Although the chain is short, it is efficient and direct.

Some accounts will appear more "professional", saying that they focus on data analysis and trend judgment, and their tone is indeed restrained, without naked shouting. But if you click on their content, you will find that they are all talking about the launch of new currencies on specific projects and specific platforms. At the end of the content, there is often a sentence: "This project is currently tradable on XX platform", and this platform is mostly their commission rebate partner.

It seems to be implicit, but the essence of helping to bring goods and traffic has not changed.

From the perspective of supervision, this is no longer a question of freedom of expression of content, but a specific act of "facilitating illegal financial activities abroad." As long as the user completes registration, recharge, and transaction through your path, the chain is closed, it can be characterized as "participation."

You said you didn’t collect money, you are not a platform employee, and you don’t manage user assets, but the role you play in the entire conversion path is clear.

Before, Lawyer Mankiw had been involved in many cases, all of which started with user reports and rights protection. The police followed the platform, content, and community all the way down, and finally traced back to the content account itself. Once the link is established, the legal responsibility falls.

Of course, Lawyer Honglin is not saying that the Web3 industry cannot produce content. I have also often seen some content accounts that really talk about industry trends, technological breakthroughs, and regulatory policies. These contents are not only not illegal, but are helpful to the industry ecology.

But we have indeed seen too many KOLs in the industry who use "explaining knowledge" and "high-level training" as a cover for attracting traffic, but are actually doing a business of "hanging links to bring transactions" or even helping project parties to sell project quotas privately.

I hope this article can make everyone understand that the regulators are no longer concerned about whether you say keywords such as "increase", "buy", and "guaranteed profit", but are starting to see whether your account has built a complete traffic-guiding behavior chain.

Attorney Mankiw Suggests

So, if you are still creating content and doing training,Attorney Honglin suggests that you carefully ask yourself the following questions:

1. Is the content you post actually recommending a certain currency, a currency on a certain platform, or an activity, even if it does not explicitly say "buy";

2. Are there any overseas cryptocurrency exchange registration links, invitation codes, or landing page jumps embedded in your articles or communities?

3. Is there any actual cooperative relationship between you and the platform in terms of rebates, conversion settlement, and promotion cooperation? Have you directly or indirectly facilitated user registration, recharge, and transactions?

These issues are important bases for characterizing the roles of participants in judicial practice. I hope everyone will pay more attention to them. Everyone should also know what can be said, how to say it, which links should be hidden, and which words should be stopped.

This industry needs freedom of expression, but as content creators, we may need to understand the boundaries and standards of the law even more.