How can programmers avoid being deemed accomplices in pyramid schemes when developing Web3 projects? An analysis of five major risk scenarios (Part 1)

In recent years, the Web3 industry has rapidly developed, with an increasing number of programmers, smart contract developers, and outsourced technical teams participating in the construction of cryptocurrency projects, contract deployment, and platform operations under identities such as on-chain engineers and project consultants. However, some projects that claim to offer "blockchain incentives," "token rebates," "GameFi game profits," and "decentralized node rewards" are, in essence, operating pyramid schemes such as "hierarchical promotion," "referral commissions," and "lock-up releases," which pose legal risks of being classified as organizing or leading pyramid scheme activities.

Recent publicly available judicial cases show that in several virtual currency pyramid scheme cases, technical participants such as programmers and contract developers, although not involved in promotion, publicity, or fund operations, were ultimately deemed as individuals who "played a key role in the implementation of pyramid schemes" due to their responsibilities in developing rebate logic, designing Token models, or deploying smart contracts with layered reward structures. Consequently, they were treated as accomplices or accessories, with some even categorized as "organizers or leaders."

This article will analyze the common criminal risk exposure points and judicial qualification logic in Web3 positions from the perspective of technical developers, combining typical cryptocurrency project cases, focusing on the following five major issues:

• What actions of programmers may be identified as accomplices in 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" in the judiciary?

• How can technical participants strive for acquittal, non-prosecution, or reclassification?

• How can developers identify risks in advance, delineate technical boundaries, and build legal defenses?

Finally, this article will combine practical experience to provide actionable risk prevention suggestions for Web3 technology participants, helping technical personnel enhance their ability to identify sensitive signals during project development, clarify behavioral boundaries, and avoid being inadvertently embroiled in criminal cases due to ambiguous role positioning and misjudgment.

Typical Judicial Cases of Pyramid Schemes Involving Web3 Projects

In recent years, there has been an increasing number of cases in the cryptocurrency sector being classified as pyramid schemes due to allegations of "recruitment-based returns" and "fund operation schemes." In these cases, roles such as programmers, technical outsourcing teams, and contract developers often become the focus of judicial scrutiny. After all, whether it constitutes a pyramid scheme often depends on the platform's business structure and underlying technical logic.

For example, in a well-known virtual currency project case, the technical team was responsible for developing the "smart arbitrage system". This feature was used in the platform's external promotion, claiming "more than 10% static returns per month, with a maximum return of even 60%", becoming a key gimmick to attract users to invest. The court ultimately ruled that this feature constituted a technical implementation tool for a pyramid scheme, and multiple individuals involved were sentenced to 2 to 11 years for organizing and leading pyramid scheme activities.

In a certain ecological platform case, the defendants jointly established a platform pyramid scheme, under the guise of providing digital currency appreciation services, developing members through methods such as "holding coins for appreciation" and "static income + dynamic commissions," constructing a multi-level team structure, and using virtual currencies as the basis for investment and returns. The platform was classified as a pyramid scheme crime, and several employees were identified as accomplices due to their participation in the daily operations and system maintenance of the pyramid scheme and were dealt with accordingly.

In addition, in projects such as blockchain games, NFT digital collectibles, and token issuance, if developers design contract modules that include logic such as "hierarchical commission", "locked release", and "node commission", they can easily be classified by judicial authorities as technical supporters of a pyramid scheme, making them subjects of accountability.

From the above case, it can be seen that whether the technical personnel bear criminal responsibility depends on whether their actions substantively participated in the construction, deployment, or maintenance of the platform's pyramid scheme structure.

Three Typical Identities of Technical Personnel Being Held Accountable

Based on recent judgments of multiple cases involving virtual currency pyramid schemes, the technically involved participants who are held accountable can be broadly categorized into the following three types of identities. When judicial authorities determine whether to establish a crime, they usually consider the specific role of the participant in the project, their understanding of the project's business model, and whether their technical actions played a key supportive role in the establishment and operation of the pyramid structure, making a comprehensive judgment. The following sections will elaborate on each category.

1. Project Technical Leader / CTO / Technical Partner 【High Risk】

This type of personnel is usually in a core position within the project team, deeply involved and with comprehensive access to information. In projects such as blockchain games, virtual wallets, and mining machine rental, technical partners often directly handle key aspects such as platform architecture construction, economic model design, and commission system deployment.

Although some technical leaders did not actually participate in recruitment promotions, their technical actions directly established the operational foundation of the pyramid scheme. When judicial authorities make a determination, they usually categorize them as "organizers," "leaders," or "key personnel involved in the activities" for accountability.

These technical roles are regarded as the "core builders" of pyramid schemes, and judicial authorities often classify them as organizers, leaders, or key accomplices.

2. Technical outsourcing companies / Freelancers [High dispute area]

In the cryptocurrency/Web3 projects, it is quite common to have outsourced teams or independent developers complete system development through contractual cooperation. Although these individuals are not members of the platform and may not hold shares or participate in operations, the content they deliver often involves key functional modules such as inviter structures, hierarchical rebate algorithms, and promotional path designs.

Judicial authorities determine whether to convict by usually focusing on the following aspects:

• Do you understand that the project uses a multi-layer commission model;

• Are you aware that the incentive logic has characteristics of a pyramid scheme?

• Whether to continue providing functional development or launch maintenance support while being fully aware of the risks.

If the technicians can prove that they only delivered according to the contract, did not participate in business model decisions, and did not obtain tokens, rebates, or other compensation from the project apart from the contractual payment, they still have a chance to argue that they do not constitute a crime or to seek leniency.

3. Smart Contract Development / Economic Model Consultant [Large space for defense]

In the token issuance or economic model design phase of some Web3 projects, project parties often bring in external technical personnel to serve as consultants or contract developers to assist in the design of token structures, profit-sharing logic construction, and deployment. Although these technical actions occur in the early stages of a project, once features such as "hierarchical rebates", "dynamic returns", and "lock-up release"—which are characteristic of pyramid schemes—are embedded in the contract, their effects will continue to be integrated into the underlying structure of the platform.

From the perspective of judicial authorities, even if such technical personnel do not participate in daily promotion and operations, if the technical logic they write is used to attract investors and promote project fission expansion, their actions may also be characterized as "assisting in the establishment of a pyramid scheme" and they could bear criminal responsibility as accomplices or for aiding and abetting.

However, in practice, if the following points are met, there is still considerable room for defense:

• The developed contract is a general logic module, not a structure specific to pyramid schemes;

• Did not participate in the platform launch, promotion, and ongoing maintenance;

• No holding of tokens, no rebates received, and no role as advisor or partner.

Judicial authorities pay more attention to whether there is "subjective knowledge + objective behavior". If the development process itself is clearly separated from the project's business model, evidence of the development boundaries can be presented to strive for acquittal or non-prosecution.

Five Typical Business Scenarios Where Developers Easily Fall into the "Pyramid Scheme Trap"

From recent judicial practices, it can be observed that Web3 technicians in the cryptocurrency sector have been held accountable, and this situation is no longer limited to the core technology leaders of the platform. With the diversification of project forms, more and more programmers, outsourced developers, and contract deployment personnel, who participate in the construction of key system functions such as "incentive structures" and "rebate logic", have become the focus of judicial authorities.

The following are common business scenarios in which technical personnel are involved in related cases:

1. Blockchain games / GameFi projects: Develop "task incentive" and "profit-sharing item" systems.

Many blockchain games / GameFi projects often package their economic structure with terms like "Play to Earn", "invite friends to dig for treasure and upgrade", and "community partner mechanism" in their external promotions to attract players to invest.

If programmers are responsible for developing modules such as "invitation rewards", "level rebates", and "brick-moving incentives", even if their logic appears to function as game features, from the perspective of judicial authorities, if this structure is linked to profit-sharing through recruiting, it may be deemed as the technical support for a pyramid scheme.

2. NFT / Digital Collectibles Platform: Design "Invitation Rebate" "Level Unlock" features

Some NFT projects, although packaged as "artworks" and "limited releases", primarily operate on the core gameplay of "invitation fission + tiered commissions". For instance, when programmers are responsible for developing features like "invitation registration rebates" and "tier-linked rewards", especially when these logics are directly tied to token monetization, the technical actions may be seen as playing a key role in driving the growth of platform revenue.

3. Token Issuance / IDO / Private Placement Projects: Deploy smart contracts with rebate structures

Contract developers typically participate in tasks such as token issuance and economic model construction in the early stages of a project. If the smart contracts they are involved in deploying contain features such as "referral code registration," "locked release," or "multi-level commission," and this structure is later determined to constitute a pyramid scheme, then even if the technical personnel did not participate in promotional activities, they may still be regarded by judicial authorities as an "accessory" or "accomplice" in constructing the pyramid scheme.

4. Virtual mining machines, computing power rental platform: Participate in the construction of the "computing power rebate system".

Some platform projects claiming "cloud computing power subscription" and "daily settlement of mining machine profits" often attract users with names like "passive income mining", "intelligent profit sharing", and "everyone's mining field". The underlying logic is essentially a dual-track structure of "static income + dynamic rebates". If programmers are responsible for core functional modules such as profit calculation, hierarchical rebates, and computing power distribution, although they play a technical implementation role in the project, from the perspective of judicial authorities, if the system directly supports key aspects such as attracting new funds and rebate expansion, it may be deemed to provide technical support for a pyramid scheme, thereby facing the risk of being held accountable.

5. "DAO Community" or "Decentralized Autonomous Organization" project: Assist in developing a ranking system and a fission reward mechanism.

Some projects utilize "decentralization" and "community governance" to package their investment structures, while in reality, they set up rules such as "node rebates", "airdrop rewards", and "referral upgrades" in the background. If a programmer develops such a reward system or hierarchical binding logic, they may be regarded by judicial authorities as participants in "assisting in the expansion of user structures" even if they do not hold tokens or have not entered management groups, and could fall under the scope of investigation.

In summary, the key point for judicial authorities in determining the criminal responsibility of technical personnel lies not in whether they promote and profit, but in whether they are aware of the characteristics of the project being a pyramid scheme and provide critical technical support. Programmers, contract developers, and outsourcing teams should conduct risk identification and boundary delineation at the early stages of cooperation to avoid inadvertently falling into the path of being identified as accomplices.

Conclusion

In the judicial processing of Web3 project-related transmission cases, technical roles such as programmers, contract developers, and outsourced technical parties often become key objects of investigation during the case handling process, as they are responsible for the development and deployment of system functions.

This article combines multiple public cases, from blockchain games and token issuance platforms to computing power projects, and sorts out the common types of involvement and business scenarios for technical personnel. It presents the basic judgment logic of judicial authorities when determining technical accomplices - whether the technical personnel supported the pyramid scheme structure of the project through technical means, and whether they possess the corresponding subjective intent and objective actions.

In the following part of this article, we will further analyze how judicial authorities determine the boundaries of "technical involvement" during conviction, and how technical personnel can leverage their roles and the evidence chain to seek acquittal, reduced charges, or even non-prosecution when facing criminal liability risks.