The cryptocurrency world seems to have a magical power. Once practitioners step into the world of Web3, they often never want to return to traditional industries. I have read an article before that accurately describes the status of Web3 workers: high salary, remote work, comfortable and dangerous .
Indeed, compared to traditional industries, Web3-related jobs have higher salary levels; project owners are generally overseas, so the domestic employees they recruit are generally distributed and do not need to clock in. For workers, this is a perfect life with high salary and freedom.
However, after entering the Web3 circle, many people will learn that there are relevant regulations in China such as the 94 Announcement and the 924 Notice, which will cause them to question whether their work content is legal in China.
Therefore, many Web3 practitioners seem to be " very secretive ". While they surf Web3 at high speed on the Internet, they are very secretive about their profession in public offline occasions.
Some Web3 practitioners will choose to consult lawyers directly to ask whether there are any legal risks in their work in China. The following picture shows a question a consultant recently sent to Lawyer Shao in the backstage:
The consultant's way of thinking actually represents the thoughts of quite a number of people, so today I want to talk about a question that confuses many people:
94 Announcement and 924 Notice are not laws / There is no relevant law that explicitly stipulates that xx behavior constitutes a crime
So can't I do my job (such as overseas currency issuance, exchange employee, DeFi, contract order taking, U-merchant, etc.)?
Author: Lawyer Shao Shiwei
Why would it constitute a crime if there is no explicit legal provision?
Friends who have a certain search ability will first look up relevant legal provisions and criminal cases when they encounter relevant legal issues. After searching, they will ask lawyers:
Is my work illegal? But I haven't found any national laws that say I can't do it?
The 924 Notice of 2021 and the 94 Announcement of 2017 have been released for a long time. Will they still be used now?
I saw some articles saying that notices and announcements are not legal provisions. But doesn’t it mean that the basis for convicting someone must be the law?
In fact, many people in the cryptocurrency circle are angry at the domestic judicial authorities because their cards are often frozen when withdrawing money:
Why is it that Hong Kong, China, and many foreign countries have opened up virtual currency transactions, but cryptocurrency speculation or related Web3 businesses in China are classified as illegal financial activities?
Why is it that even though the law does not explicitly stipulate that relevant acts constitute crimes, many criminal cases are determined to have committed crimes based on the 94 Announcement and the 924 Notice?
But this is actually a misunderstanding. Due to limited space, today we will only talk about, in Web3 criminal cases, is the basis for convicting the parties really just the 94 announcement and the 924 notice?
This starts with the characteristics of law. One of the characteristics of law is stability. It requires that once it is formulated and promulgated, it must maintain its seriousness and authority and cannot be modified or changed at will. This leads to a significant lag in the law in responding to emerging social issues. In the implementation process, it is often unable to reflect the rapid changes and development of society in a timely manner. At present, my country's current "Criminal Law" is still the 1997 Criminal Law. Although 12 amendments to the Criminal Law have been issued since then, it is still impossible to have comprehensive regulations for all emerging industries.
Take the NFT digital collection industry as an example. Digital collections have been popular in China since 2022, and it has been four years. Are there any legal provisions? Still no.
However, our team has represented nearly ten criminal cases involving NFT digital collections as defense lawyers in the past three years. Some cases were withdrawn, some were not prosecuted, but some cases eventually went to court and were sentenced heavily.
Therefore, since there are no explicit legal provisions in the industry itself, we cannot necessarily conclude that a certain business does not have any legal risks.
Does this mean that in emerging fields such as Web3 where there are no legal provisions, the public security organs can arbitrarily accuse the parties of suspected crimes? Of course not.
What are the reasons that lead to criminal risks in Web3-related businesses?
In judging whether an act constitutes a crime, criminal law has always looked beyond the phenomenon to the essence .
Take the case of BKEX, which was convicted of operating a casino. Why was the perpetual contract business of the exchange considered as operating a casino? If the current verdict is followed, will all perpetual contract businesses of all exchanges be considered as gambling?
At the beginning of 2025, the court announced the criminal judgment of this series of cases. From the description therein, we can see that:
The reason why the perpetual contract business of BKEX Exchange was found guilty of opening a casino is that in addition to ordinary perpetual contracts, it also launched a 1000-fold crazy contract business, which obviously increased the speculation of the transaction. In addition, BKEX Exchange also engaged in transactions with users. Therefore, this business model was identified by the court as "betting on size and winning or losing", which is essentially the same as gambling.
So, back to the previous question: Are all perpetual contract businesses of exchanges considered gambling? Of course not, because perpetual contracts are essentially a kind of financial derivatives. I have also written related articles to discuss this before (for details, please refer to ➡️Does the perpetual contract business of virtual currency trading platforms constitute the crime of opening a casino? ). It is not a gambling behavior of risking a small fortune. As for the perpetual contract of BKEX exchange being considered gambling, it is actually related to the business model of the exchange itself.
Therefore, for any Web3 project itself or the work content of Web3 practitioners themselves, when judging whether there are legal risks and the size of the legal risks, we need to analyze specific issues specifically.
When consulting lawyers, many consultants feel afraid and anxious about the uncertainty of their own legal risks, so they want to ask lawyers for a certain result. We can understand this mentality, but the more difficult the situation is, the more we should remain rational. We must know that in the blank areas of the law, the judgment of guilt and innocence cannot be black and white.
The consultant must understand the truth
Web3 practitioners must not have an ostrich mentality. This is a piece of advice that Lawyer Shao has given to everyone after representing many Web3 criminal cases.
When you are worried about whether your job or business has legal risks and therefore consult a lawyer, you must think clearly about what the purpose of consulting a lawyer is .
It is just to argue with the lawyer :
The 924 Notice and other documents are not laws, so how can my actions pose any legal risks?
Why do you say there is a risk, but I don’t see any national law that stipulates that this is illegal?
Since you said that there are risks in doing this business, then why do I see so many people doing it, and they have been doing it for many years, and nothing has happened?
Or through communication and question-and-answer with the lawyer, learn more about :
Where is the boundary of the criminal risk involved in one’s own behavior?
What is the scale and scope of our country’s judicial organs’ crackdown on related behaviors?
Although there is no explicit legal provision, in judicial practice, which behaviors have relatively high criminal risks?
This will deepen your legal understanding of your own behavior and help you make better decisions.
After all, given the restrictions of domestic policies, some Web3 businesses are indeed red lines in China, such as issuing coins, and business models involving gambling and pyramid schemes. The purpose of writing this article is not to deny the legitimacy of all Web3 projects , but to illustrate that sometimes related businesses are indeed in a gray area between crime and non-crime, but everyone's risk tolerance varies greatly.
Lawyer Shao hopes that the consultant will make the most correct decision for himself after understanding the corresponding legal risks and boundaries and being able to foresee the worst outcome, so as to avoid possible regrets and remorse in the future.
