Using the Terra and Xin Kangjia cases as examples: How to determine the crime of organizing and leading pyramid schemes involving virtual currencies?

Writing by: Shao Shiwei

In recent years, more and more cases—whose outward appearance is characterized by virtual currencies, node devices, a dual-token mechanism, and a team promotion system—have entered the scope of judicial review for crimes of organizing and leading pyramid schemes. Compared with traditional commodity-based pyramid scheme cases, such cases often simultaneously contain multiple features, including technical mechanisms, token structures, community governance, and tiered layers of agents. This leads to major disputes in judicial determinations over issues such as qualification for joining, tier relationships, team compensation, and subjective knowledge.

In light of this, this article intends to use two publicly available cases—Terra (UST & LUNA) and the “Xinkangjia” major pyramid scheme case—as analytical samples. It will conduct a research-based review of the common reasoning logic, investigative priorities, and controversial issues when virtual currency projects are accused of organizing and leading pyramid schemes, with a view to providing references for relevant investigators, researchers, and those who are concerned about the handling paths for such cases.

The core viewpoint of this article is as follows: when virtual currency projects are accused of organizing and leading pyramid schemes, judicial determinations usually center on joining qualifications, tier relationships, team compensation, the fraudulent acquisition of property, and the organizer/leader’s status. Among these, dual-token models, algorithmic stablecoin mechanisms, node qualifications, direct referral/indirect referral awards, and agent systems do not automatically amount to the legal elements of the pyramid scheme crime being satisfied. Substantive judgment is still required based on specific rules, sources of funds, the structure of evidence, and the roles of the actors involved.

1 Terra and Xinkangjia: how the “mode of play” works—dual tokens, algorithmic stablecoins, hierarchical promotion, and team compensation

(A) Terra (UST & LUNA): how the dual-token model, algorithmic stablecoin mechanism, and a high-yield appearance affect legal evaluation

The Terra project is a blockchain project co-founded in 2018 by Do Kwon and Daniel Shin. The project rose rapidly in 2021, becoming one of the most popular public chains after Ethereum. However, its core product—an algorithmic stablecoin UST that is claimed to be pegged to 1 US dollar—suddenly collapsed in May 2022. Along with the LUNA token, it fell into a “death spiral,” causing about $40 billion in market value to evaporate within days. On December 11, 2025, Do Kwon was sentenced to 15 years in prison by a U.S. court.

In Terra’s publicly described operational logic, UST functions as an algorithmic stablecoin, while LUNA is the core token running alongside it. Together, they form a relatively typical dual-token structure. Its basic design idea is to maintain UST’s price peg through minting and burning mechanisms, while LUNA undertakes the functions of absorbing price volatility, adjusting mechanisms, and carrying value. From the appearance of the project, this arrangement is not the traditional direct collection of an entry fee in the conventional sense. Yet through technical mechanisms, pricing mechanisms, and token structures, it does present participants with a participation picture in which stability and growth can coexist.

The research value of Terra lies in the fact that it fairly concentratively displays several key outward features found in virtual currency cases. First, how a dual-token model is packaged as a technological solution. Second, how an algorithmic stablecoin mechanism, in form, creates the impression of sustainable operation and a self-balancing effect. Third, how a high-yield product and a token ecosystem reinforce each other, thereby affecting participants’ judgments about risks, rewards, and value support. In terms of common discussion habits in practice, this Terra sample also helps understand the common technical packaging logic found in algorithmic stablecoin pyramid schemes, dual-token model pyramid schemes, and certain DAO project pyramid scheme cases. In particular, within market perceptions formed around UST, LUNA, and related yield scenarios, what participants often see are technical descriptions such as protocols, pegs, stability, and appreciation—not legal expressions of fund sources, value conveyance, and liquidity risks.

Terra provides us with a “technical mechanism sample.” It reminds us that when reviewing criminal cases involving virtual currency pyramid scheme crimes, we must not separate technical structures from criminal law evaluation, nor omit substantive review of revenue sources, participation thresholds, value support, and risk disclosure methods merely because of on-chain mechanisms, algorithmic rules, or a protocol governance appearance. For controversial concepts such as algorithmic stablecoins and dual-token models, the significance of the Terra case lies more in explaining how technical packaging influences legal recognition, rather than implying that anyone who designs such technology can be naturally handled according to pyramid scheme logic.

(B) The “Xinkangjia” case: how entry thresholds, tier relationships, direct referral/indirect referral awards, and team dividends form a pyramid scheme review sample

The Xinkangjia project is a platform established in Guizhou in 2024. It rose rapidly in the first half of 2025, under the banner of the “Dubai Gold Exchange DGCX China Branch,” attracting approximately 2 million investors. However, its core model—promising a daily 1% ultra-high return, using USDT stablecoins as the payment tool, and recruiting “people heads” through a nine-level pyramid scheme structure—collapsed completely in June 2025. Before the collapse, founder Huang Xin transferred about 1.8 billion USDT (equivalent to about 12.9 billion RMB) overseas. The platform then shut down withdrawals. At present, multiple public security authorities have characterized it as suspected fundraising fraud and the crime of organizing and leading pyramid scheme activities.

Unlike Terra, which mainly reflects technological mechanisms, the “Xinkangjia” major pyramid scheme case presents another type of relatively typical organizational expansion logic. According to publicly available materials, in terms of its operational approach, the case is closer to the common “qualification threshold—tier development—team compensation” structure in traditional pyramid scheme crimes. Participants need to obtain entry qualifications in a certain manner, and within the system, continuous expansion is achieved by relying on layered recommendations, team fission, and graded rebates. Within its organizational model, there is usually a strong correlation between the entry threshold, agent tiers, team performance, and the rebate ratio. Mechanisms such as direct referral awards, indirect referral awards, and team dividends also become important arrangements for maintaining personnel growth and strengthening organizational control.

The practical research significance of this kind of case lies in the fact that its public information presents relatively completely several core structures that the crime of organizing and leading pyramid scheme activities focuses on. First, participants are not merely consuming goods or services. After obtaining qualifications, they enter a system that can continue to develop others and obtain rebates. Second, there are clear hierarchical relationships within the organization, and through rule design, the development of personnel, team size, and the level of earnings are linked together. Third, the distribution of profits does not mainly depend on genuine independent business activities, but rather on the ongoing influx of funds and personnel expansion formed by the continuous addition of subsequent members.

From practical contexts such as “using digital currency to recruit people heads,” “getting arrested for promoting projects in the crypto circle,” and “is the node model a pyramid scheme,” the “Xinkangjia” case is more like a “structural sample” of an organization. It prompts investigators that when reviewing certain criminal cases that take the outward form of crypto circle projects or Web3 projects, they should focus on whether a stable agent network has already been formed, whether there are hierarchical rebate relationships, and whether there is a team compensation mechanism centered on developing the number of people. In particular, the central position of direct referral awards, indirect referral awards, and team dividends within the overall earnings structure should be examined. Compared with the “technical mechanism appearance” reflected in Terra, the “Xinkangjia” case more directly corresponds to hierarchy, compensation, and organizational control issues under the traditional pyramid scheme review framework.

© From Terra to “Xinkangjia”: why virtual currency projects simultaneously have both technical packaging and a people-recruiting structure

What Terra and “Xinkangjia” represent, in fact, are two outward forms that frequently intertwine in current virtual currency cases. The former mainly highlights technical packaging such as a dual-token structure, algorithmic stable mechanisms, and a high-yield design. The latter mainly highlights organizational expansion logic such as entry qualifications, tiered organizations, team dividends, and direct/indirect referral awards.

The complexity of some current cases lies precisely in the fact that they may form an appearance of project legitimacy and sustainable returns by leveraging technical mechanisms, and may also form a promotion revenue structure by leveraging an agent system, node qualifications, and team fission.

Therefore, legal evaluation of such cases cannot look only at the technical design, nor only at the promotion method. It should conduct an integrated review of the token mechanism, entry thresholds, the organizational structure, and the sources of rebates.

2 How to recognize the crime of organizing and leading pyramid scheme activities: entry fees, tiers of three levels and more than thirty people, team compensation, and fraudulent acquisition of property

Article 224-1 of the Criminal Law provides that organizing or leading pyramid scheme activities “by naming them as business activities such as selling goods or providing services,” requiring participants to obtain entry qualifications by paying fees or purchasing goods or services, and forming tiers in a certain order. It also provides that direct or indirect compensation or rebates are based on the number of people developed, and the organizer/leader “induces or coerces participants to continue developing others to join,” thereby fraudulently obtaining property and disrupting economic and social order. This constitutes the crime of organizing and leading pyramid scheme activities. In connection with the application of this crime, the “Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security on Several Issues Concerning the Application of Law in Criminal Cases Concerning Organizing and Leading Pyramid Scheme Activities” also provides further explanations on issues such as qualification for joining, tier relationships, the organizer/leader status, and standards for prosecution. In virtual currency cases, the above provisions have relatively clear correspondences with the two types of cases represented by Terra and “Xinkangjia.”

(A) Buying tokens, equipment, or node qualifications: do they fall within the “entry fee” in the pyramid scheme crime

In practice, the investigating authorities usually believe that, for the recognition of “obtaining entry qualifications by paying fees or purchasing goods or services,” the key is not the payment label, but whether the payment behavior substantively constitutes entering the system, obtaining promotion qualifications, or obtaining rebate qualifications. The “Opinions” (hereinafter referred to as the “Opinions”) also reflects the basic approach of focusing on substance rather than form: one cannot exclude the character of a pyramid scheme merely because there are goods, services, or a technical appearance.

In the Terra project, participants’ investment does not manifest as the traditional form of paying an entry fee commonly seen in pyramid scheme cases. Instead, it is more reflected as purchasing, holding, exchanging, or entering a certain token yield structure. Such a structure prompts investigators that in virtual currency cases, the legal appearance of consideration often changes. The consideration paid by participants may not necessarily be a single fiat currency, and may not necessarily be an offline charge. It may instead be reflected as purchases of stablecoins, holding of governance tokens, connecting to yield scenarios, staking arrangements, or other on-chain operations. In this regard, the “entry fee” issue in virtual currency cases often needs to be grasped by looking at the relationship between token functions and participation qualifications.

Compared with this, the “Xinkangjia” case is closer to a traditional recognition path. If participants are required to first pay consideration, thereby obtaining the qualification to join a system, develop downlines, obtain promotions to certain levels, or participate in team rebates, then such payments are more likely to be interpreted by investigating authorities as an entry threshold for the crime of organizing and leading pyramid scheme activities. Especially in some cases where the payment behavior is closely tied to subsequent promotion qualifications, investigating authorities generally tend to view that it already meets the constituent feature of “obtaining entry qualifications by paying fees or purchasing goods or services.”

From the perspective of defense, there is still some space for dispute regarding the entry fee element.

Attorney Shao believes that, in virtual currency cases, whether purchasing equipment, subscribing to nodes, holding tokens, and completing staking automatically qualifies as an entry fee under the pyramid scheme crime cannot be determined solely based on the payment fact itself. Instead, the following matters should be examined: whether the relevant equipment, services, or tokens have real usage value independent of promotion qualifications; whether the payment behavior is necessarily linked with developing personnel and team-based compensation; and whether participants can obtain the main rights and interests in the same legal relationship without developing others. In other words, whether node models, dual-token models, or token participation arrangements in DAO projects automatically equal “paying an entry fee” cannot be handled in a one-size-fits-all manner under the crime of organizing and leading pyramid scheme activities.

(B) How to calculate “above three tiers” and “more than thirty people” in pyramid scheme crimes: agent tiers, invitation code relationships, and recognition of actual headcount

According to the “Opinions,” if the participants in an organization who participate in pyramid scheme activities number more than thirty and the tiers are above three, the organizer or leader shall be prosecuted. In practice, investigating authorities typically quantify the number of tiered persons and the organizational network based on materials such as recommendation relationships, registration links, backend tier diagrams, profit distribution paths, and team performance structures.

The “Xinkangjia” case is a relatively suitable typical case for addressing this issue. If there is a clear upstream-downstream and downline relationship within the system, and different tiers form stable team performance “penetration” and rebate distribution through rules, then, in the sense of criminal law, it is more likely to be recognized as a tiered structure of “more than three tiers.” At that time, the recognition of “more than thirty people” is not limited to the number of direct recruits at a single tier. It often includes both direct and indirect developed persons throughout the network in the statistical count.

However, the Terra case also reminds us that tier relationships in virtual currency projects are not necessarily the same as tier relationships in the sense of pyramid scheme law. Token holding relationships, protocol participation relationships, ecosystem governance relationships, and node collaboration relationships, although they may technically show a structure such as upstream—downstream, early stage—late stage, and core—periphery, do not necessarily have the organizational control attributes of “upstream—downstream—further downline” in criminal law. If all on-chain participation relationships, community governance relationships, or token holding relationships are mechanically equated with pyramid scheme tiers, it is easy to result in an expansion of legal evaluation.

From the defense perspective, the common disputes in recognizing tier relationships in virtual currency cases include: whether wallet addresses, device IDs, backend accounts, and natural person identities can be stably matched; whether there are situations such as one person holding multiple accounts, multiple people sharing one account, test accounts, empty accounts, or duplicate accounts; and whether titles such as “city partner,” “regional node,” and “community leader” correspond to actual management authority and organizational control functions. In practice, disputed issues such as how to calculate “more than thirty people and more than three tiers” in the pyramid scheme crime, and whether agent tiers automatically count as pyramid scheme tiers, all essentially center on these points.

Attorney Shao believes that in such cases, a formal recommendation relationship diagram, the device activation sequence, or community layering cannot automatically replace the criminal-law meaning of tier recognition. The existence of tiers should still be established on the basis of a comprehensive review of real participation, stable relationships, and rebate rules.

© If there are direct referral awards, indirect referral awards, and team dividends, does it automatically constitute pyramid scheme compensation and fraudulent acquisition of property

In judicial recognition of the crime of organizing and leading pyramid scheme activities, team compensation and “fraudulently acquiring property” are usually the two most controversial aspects. In practice, investigating authorities typically focus on: whether income is mainly used as rebates based on the number of developed personnel, team size, or downline performance; whether the source of rebates mainly relies on the ongoing influx of funds formed by the continuous entry of subsequent participants; and whether the project causes participants to continuously deliver property based on erroneous beliefs through methods such as exaggerating returns, downplaying risks, and packaging technical mechanisms.

Regarding Terra, its value lies in demonstrating how technical mechanisms themselves influence participants’ cognition. Algorithmic stablecoins, dual-token structures, high-yield scenarios, and related promotional narratives often lead participants to form an understanding that the project can self-balance, that returns have institutional protection, and that risks can be digested through technology. Such technical expressions may not necessarily automatically constitute false propaganda under pyramid scheme criminal law. However, what it teaches us is that in virtual currency cases, the review of “fraudulently acquiring property” cannot be separated from the way technical mechanisms and market promotion are combined. Especially where high-yield design and risk concealment coexist, whether participants’ delivery of property is based on erroneous beliefs becomes a key focal point of dispute in the case.

The “Xinkangjia” case more reflects another recognition path that is closer to traditional pyramid schemes. If the direct referral awards, indirect referral awards, and team dividends within the system mainly use personnel development numbers and team expansion scale as the basis for rebates, and if the source of rebates is not from independent operating activities but mainly from the consideration paid by subsequent participants, then it is easier for investigating authorities to interpret it as “directly or indirectly basing compensation or rebates on the number of persons developed.” On that basis, if the project side further continues to attract members by ways such as stable earnings, rapid recovery of capital, and team fission profits, investigating authorities usually also find it easier to expand their argument toward the direction of “fraudulently acquiring property.”

However, from the defense perspective, team compensation does not automatically equal fraudulent acquisition of property, nor does a project collapse automatically retroactively determine the criminal law evaluation at the point in time when the collapse occurred. This article holds that, in virtual currency cases, the recognition of team compensation and “fraudulently acquiring property” should at least focus on four levels: first, whether the source of returns is truly independent of subsequent personnel joining, or whether it mainly depends on the continual entry of newly added participants; second, whether the project has verifiable independent business scenarios, technical services, or ecosystem support; third, whether the related high-yield promotion is merely market vision and commercial statements, or factual commitments sufficient to cause participants to form erroneous beliefs; fourth, what the direct cause of participants’ delivery of property is—whether it is due to investment judgment, technical participation, consumption of equipment, or expectations of tier-based rebates and stable returns. If these issues are not subjected to specific review and the argument is completed simply by stating that “there are tokens, there is promotion, and there are returns,” there is obviously a risk of simplification.

3 How to investigate virtual currency pyramid scheme cases: evidentiary paths using on-chain data, electronic data, and agent testimony

After a virtual currency project is accused of organizing and leading pyramid scheme activities, the evidentiary path of the investigative authorities usually differs markedly from traditional offline pyramid scheme cases. Its core feature is that the facts in the case are often not formed purely through physical ledgers, offline training materials, and personnel statements. Instead, they rely more on cross-verification between on-chain data, backend data, electronic evidence, and testimonial evidence. Therefore, analyzing the investigative focus for such cases is, in practice, also an important prerequisite for understanding the logic of their legal evaluation.

(A) How on-chain data can be used to prove tier relationships, fund pooling, and rebate mechanisms

In virtual currency cases, the investigative significance of on-chain data is usually not limited to proving that transfers have occurred between certain addresses. Rather, by using transaction hashes, address clustering, contract call records, staking and redemption logs, and profit distribution paths, investigators can reconstruct the flow of assets within the project and the rules for distributing returns. Investigating authorities typically attempt to prove: how the virtual assets delivered by participants enter into the control paths of the project operator; whether there are stable pooling relationships between certain addresses; whether the distribution of returns among different tiers has structural correspondence with recommendation relationships and team relationships; and whether on-chain behaviors such as staking, redemption, token issuance/increase, and dividends match the project’s claimed yield mechanisms. For the crime of organizing and leading pyramid scheme activities, the most important evidentiary direction of on-chain data is not merely that transactions indeed occurred on-chain, but how these transactions form an institutional connection with joining qualifications, tier structures, and rebate mechanisms.

(B) Why chat records, training materials, and backend screenshots become key evidence in pyramid scheme cases

Besides on-chain data, electronic data are one of the most core evidence carriers in the investigative stage. Common materials include group chat logs, training courseware, recruitment posters, roadshow videos, voice explanations, APP backend screenshots, equipment activation records, server mirror files, and email exchanges. These materials often collectively point to several issues: how the project introduces itself to the outside; how returns are interpreted and presented; how the agent system is set up and managed; and how direct referral awards, indirect referral awards, and team dividends are solidified in the rules. For Web3 project criminal cases, the significance of electronic data lies in the fact that they can often place technical claims, market claims, yield claims, and tier claims into the same evidence chain for verification, thereby affecting the investigative authorities’ overall judgment of the project’s nature.

© To what extent can testimonies from agents, community leaders, and promoters prove the facts of the case

In such cases, verbal evidence from agents, promoters, community management personnel, and ordinary participants also holds an important position. In particular, it has direct value in proving training content, organizational structure, promotion methods, and rebate rules. However, in practice, the evidentiary strength of an agent’s testimony is not automatically stable. On the one hand, participants at different tiers may have different depths of understanding of the project’s mechanisms, different levels of contact, and different interest positions. On the other hand, some testimonies may reflect the individual’s personal understanding rather than being fully equivalent to the project rules themselves. Therefore, when investigating authorities use verbal evidence, they usually still need to cross-verify it with backend data, electronic materials, and on-chain records. In addition, it should be emphasized that in such cases, agent testimonies are often important, but they do not automatically, by themselves, complete all evidentiary tasks of proving tier relationships, yield structures, and organizational control.

4 The main disputed points in such cases and defense “grasp points”

In such cases, especially for the involved persons and their family members, they often pay close attention to issues such as: how the crime of virtual currency pyramid scheme is recognized; what to do if a crypto circle project being promoted leads to arrests; whether a dual-token model is a pyramid scheme; whether a node model is a pyramid scheme; and whether a city partner counts as an organizer or leader. Although the legal wording of the above issues differs, they can generally be summarized into the following several disputed points.

(A) The main disputed points in virtual currency project pyramid scheme cases: common defense grasp points and recognition boundaries

In virtual currency cases, the form in which participants pay consideration is more diverse than in traditional pyramid scheme cases. It may manifest as purchasing equipment, subscribing to nodes, holding tokens, exchanging stablecoins, or staking protocols. Investigating authorities often tend to evaluate from the legal functions of the payment behavior to judge whether it constitutes an entry qualification threshold.

However, from the defense perspective, purchasing equipment, tokens, or node qualifications does not automatically equal “entry fees” in the sense of criminal law. The core dispute is not whether there is payment, but whether the payment is substantively used to obtain promotion qualifications, rebate qualifications, and tier qualifications. It also concerns whether the relevant equipment, services, or tokens have genuine independent value beyond organizational expansion. For dual-token model pyramid scheme and algorithmic stablecoin pyramid scheme types of cases, this is often one of the earliest disputed issues.

(B) If there are recommendation relationships and agent tiers, does it automatically satisfy “more than thirty people and three tiers or more”

For cases involving promoting crypto circle projects and then getting arrested, one of the most common accusation logics is that since there are invitation code relationships, agent levels, recommendation networks, and team performance structures within the project, a pyramid scheme hierarchy must already have been formed. However, from the standpoint of normative assessment, formal recommendation relationships and hierarchical relationships in criminal law cannot be simply equated. Especially in virtual currency projects, complex mapping relationships often exist among wallet addresses, device accounts, node numbers, and natural person identities, and the number of people shown in a tier diagram does not necessarily equal the actual number of participants. Therefore, for recognition of “more than thirty people and three tiers or more,” further specific review of its authenticity, stability, and legal nexus is still required. It cannot be generalized and determined merely by system diagrams or title names.

© If there are direct referral awards, indirect referral awards, and team dividends, does it automatically constitute pyramid scheme compensation

Direct referral awards, indirect referral awards, and team dividends are among the most attention-getting structural features in digital currency “recruitment-by-referral” type cases. Investigating authorities typically view them as an important indicator that uses the number of developed personnel as the basis for rebates.

However, from the defense perspective, the names of bonuses themselves cannot replace legal evaluation. The key remains: whether the rebate basis is truly team personnel numbers, or instead some independent transaction, service, or ecosystem behavior; whether the source of returns mainly comes from newly added participants entering, or whether there is genuine independent business support; and the position of the bonus system within the entire project—whether it is an auxiliary promotion arrangement or the core mechanism driving project operation. If these issues are not subjected to substantive review, team rewards are easy to be over-simplified into an inevitable conclusion that they constitute pyramid scheme compensation.

(D) Whether agents, city partners, and community leaders automatically belong to “organizers and leaders”

In virtual currency projects, identity setups such as agents, city partners, regional node, community leaders, and even guild presidents are fairly common. But identity names do not equal criminal-law evaluation, and receiving a certain share of earnings also does not automatically mean that the person has reached the organizational and leading tier. In practice, the recognition of organizers and leaders still needs to be determined by considering factors such as whether the person participates in institutional design, whether they hold the team’s control power, whether they are responsible for training and recruiting vendors, whether they enjoy backend permissions, and whether they can actually decide how earnings are distributed. In other words, nominal tiers, market appellations, and the organizational control status under criminal law do not necessarily overlap. This issue will be discussed separately later in the text.

(E) How to delineate responsibility boundaries of different roles in technology, operations, marketing, and community

In the same virtual currency project, the positions held by different people, the stages at which they participate, the scope of their permissions, and their earnings models often differ significantly. Between core technical personnel, operations and management personnel, marketing recruiting personnel, community maintenance personnel, and ordinary agents, their behavior patterns, subjective cognition, and the degree to which they control project rules are not the same. Criminal liability should not be handled uniformly in a one-size-fits-all manner. Especially in some Web3 project criminal cases, the outside world may easily confuse participation in the project with automatically bearing the same level of criminal liability. However, from a normative standpoint, different roles, different permissions, and different cognition in themselves may correspond to entirely different responsibility boundaries. This issue also warrants a systematic analysis.

5 Such cases—virtual currency projects, DAO projects, and dual-token model cases—should not be treated homogenously

After a virtual currency project is accused of organizing and leading pyramid scheme activities, the most important judicial task is often to avoid two simplifications in opposite directions: first, because the project has technical outward features such as blockchain, dual tokens, algorithmic stable mechanisms, and a node ecosystem, one should not automatically reduce substantive review of its organizational structure, sources of returns, and rebate rules; second, because the project has promotion relationships, team rewards, and an agent system, one should not automatically evaluate it as completely homogeneous with traditional pyramid scheme cases. What the Terra and “Xinkangjia” cases point to is precisely the real-world scenario in such cases where “technical mechanisms” and “organizational structures” frequently coexist and overlap. When handling such cases, one should still return to the specific rules, the actual operations, the structure of the evidence, and the roles of the actors themselves, and analyze joining qualifications, tier relationships, team compensation, property delivery, and subjective knowledge item by item.

This article mainly discusses the general recognition standards for organizing and leading pyramid scheme activities involving virtual currency projects. Subsequent articles will respectively discuss two more practically significant issues:

First, whether agents, city partners, and community leaders in virtual currency projects will necessarily be recognized as organizers or leaders;

Second, how to delineate the criminal responsibility boundaries for personnel in different roles—such as technology, operations, marketing, and community—in the same project.

The former will focus on responding to “whether agents and city partners necessarily constitute organizers or leaders,” while the latter will focus on “the criminal responsibility boundaries of different roles in Web3 projects and DAO projects.”