How to conduct offline activities in Web3, how to be safe, legal and compliant?

Author of this article: Lawyer Iris, Liu Honglin

In Web3, "holding events" has become the standard action for almost every project party. Do you want to expose it? Do you want to cooperate? Organizing events and participating in events is definitely one of the best ways to solve these two problems.

I don’t know if you have participated in the recent Web3 Festival held in Hong Kong. In addition to the large summit of the main venue, this event has a wide range of activities, from cocktail parties, Afterparty, technical salons, to Meetup, closed-door meetings, hackathons, and forums. It can be said that the concentration of Web3 in Hong Kong was extremely high throughout April.

However, many organizers will think that holding an event is just planning a process, inviting guests, and then finding a venue or platform to do promotion and distribution, which is very simple!

But in fact, there are still many compliance matters in holding events, especially Web3, as an industry that has both financial attributes, technical characteristics and cross-border characteristics, the compliance risks of offline activities are far higher than those of ordinary industries. Ignoring these compliance is often a taboo.

Therefore, in this article, lawyer Mankun systematically sorts out common legal matters in Web3 activities from the perspective of the event organizer, combined with the real logic and practical operation points, and helps the project party and operation team truly "carry out activities in compliance with the legal and compliant activities."

Three-step compliance logic for organizing events

The reason why Web3 activities are sensitive is not just because it has the shadow of "coin", but because it involves too many gray areas across industries, regions and identities.

Therefore, the question that the event organizer should really think about is: In the three stages of event planning, execution and subsequent stages, have I achieved "duty and responsibility" and thought of all potential risks first and controlled first?

Step 1: Event Planning Stage

What activities do you want to do? This is the first step in all compliance judgments.

When planning events, many Web3 organizers often only focus on the surface labels such as "technology sharing" and "community gathering". But from the perspective of supervision, the real key is the essence and purpose of your event—

Are you promoting tokens? Are you organizing financing? Is it convenient for overseas platforms to develop their business domestically?

These elements determine which compliance risk level your activity is at, not what name you wrap it with.

Here, based on personal experience and judgment, lawyer Mankun divided Web3 offline activities into three types of risk levels according to their substantive content:

Low-risk activities

For example, purely technology-oriented Hackathon (such as ETHGlobal), R&D Workshop, and closed-door developer communication. Such activities are centered on code and products, do not involve financing or promote tokens, and the overall risk is low. But you should also pay attention to avoid using tokens for bonuses and matching results with token projects, and beware of the question of "borrowing technology packaging to issue coins".

Medium-risk activities

Usually, activities such as industry summits, press conferences, project meetings, cocktail parties, etc. that have the nature of "promotion" or "market warm-up". It seems to be social, but if the guest's speech involves project currency, media follow-up overheating, and participants' identities are complex, it is easy to be questioned as "disguised marketing." Therefore, such events require the organizer to carefully select attendees, especially speakers; it is also best not to arrange KOLs in the currency circle to avoid forming a "token association chain".

High-risk activities

This type is basically related to investment and financing or tokens, such as closed-door financing matchmaking meetings, private domain investors meetings, and token roadshow activities. Once this kind of scenario is targeted at mainland Chinese investors, it is very easy to cross the red lines of illegal securities issuance and illegal fundraising. To reduce this type of risk, you can set entry thresholds in advance (such as limiting overseas licensed institutions/no currency involvement), the information is only overseas, and the entire process does not discuss "price expectations" and "return on investment", and at the same time retain compliance backup records.

Many organizers may think: "I was doing something wrong with my event in Hong Kong?" But please note: If your content or dissemination reaches mainland Chinese users, even if the venue is overseas, it may be considered by regulators to "provide services to domestic residents."

Therefore, the risk of an event does not only depend on where you are doing it or what you are calling it, but what you say, who is listening, and whether the funds are flowing.

In addition, when it comes to overseas personnel, minors, and specific occupational identities (such as financial practitioners), laws and regulations in some regions will require activity registration or specific permissions. If these requirements are ignored, even if the activity itself does not have any illegal acts, it may be questioned or processed due to inadequate identity verification.

So, when planning an event, lawyer Mankun suggested that there are three things to do:

1. Substantively classify the activity types and look at the actual content and goals;

2. Confirm that the activities reach the boundaries, especially whether they involve mainland Chinese users, sensitive countries and regions, and cross-border publicity;

3. Set up a "content compliance line" in advance, that is, what words are not said, what information is not sent, and who are not invited.

Remember: You are not planning an event process, but developing a compliance behavior narrative. If you classify the wrong category, you may be wrong if you are careful later.

Step 2: Activity execution phase

The process has been decided, and then we will enter the stage of true "implementation and implementation". But at this stage, compliance issues are most likely to be triggered due to omissions in detail.

Anyone who has done activities knows that planning is one thing, and execution is another. In reality, many problems are not intentional when planning, but "accidentally hit the red line" during the execution process.

Lawyer Mankun summed up the key issues in the execution phase of the event into three links:

(1) Is the promotional content crossing the line?

Many organizers are prone to misleading due to improper wording when designing event materials, making PPTs, and publishing promotional drafts, especially the following high-frequency "risk terms" should be paid special attention to:

• "To be launched/issued coins/listed"

• "Airdrop", "Advance subscription", "X-fold potential coin"

• "XX investment institutions lead the investment" and "famous VC platform"

• Coin price forecast, return expectations, investment return description

Once these expressions appear, they may be recognized by regulators as having a tendency to illegal financial activities such as "token sales promotion" and "money raising funds to the public".

Therefore, in terms of publicity materials, it is recommended to set up a compliance review mechanism uniformly. It is best to have legal or lawyers who can assist you to review and predict all external posters, tweets, event manuals, guest PPTs, etc. one by one, and clarify which information is "only spoken privately and not publicly."

(2) Is there any risk in on-site speech?

In forums or Meetup activities, the content of the guest speeches is often uncontrollable. But please note that as long as the event is organized by the organizer, the responsibility for its content may be "returned to you".

In practice, regulators often do not just look at whether the organizer "promotes in person". As long as you are the event organizer and hosting platform, whether it is the guest "revealing" on the spot, the PPT's modern currency roadmap, or the interview session suggests token trading opportunities, the regulator may determine that you have not fulfilled your content review obligations and thus bear joint risks.

There is also a typical "compliance hidden lightning" that is indirect support for overseas platforms or services. For example, a project arranged platform representative speeches, QR code jump registration, technical product embedding demonstrations and other contents during the event. Although the organizer did not directly involve currency or provide transaction portals, it may eventually be characterized as assisting illegal financial activities because it "provides convenience for overseas platforms to develop their businesses in China."

Therefore, the event organizer must review the content of the guest's speech in advance and give prompts to the speakers on the spot, especially when sharing currencies, platforms, and projects. Be careful not to guide investment, display trading logic, or imply price trends. At the same time, during the speech, we should also take the venue as much as possible.

(3) Are there any loopholes in the funding and venue links?

Don't underestimate the compliance sensitivity behind "receiving tickets" or "accepting sponsorship." The behaviors of collecting tickets with crypto assets and accepting token sponsorships have great compliance differences in different regions. For example, in strictly regulated areas such as mainland China, regulators have repeatedly emphasized that virtual currency should not be used as payment tools. If the activity is charged through tokens such as USDT, it may be regarded as providing virtual currency payment services, and it is then classified as "illegal financial activities."

Even in relatively open areas such as Hong Kong and Dubai, if the sponsor is a sensitive entity such as unlicensed overseas trading platforms, crypto investment institutions, etc., the event organizer may be considered to be "assisting unlicensed virtual asset service providers in their business", especially when the event includes project promotion, brand exposure and other links, the risk is higher.

At the same time, there are compliance standards for the selection of event venues, such as whether the event venue is legal and open to the public? Is temporary registration required? Is the maximum number of people exceeded? Are there any overseas participants or representatives of sensitive countries? Many organizers will not consider these issues clearly in the initial planning, but in some jurisdictions, such as mainland China, once they step on a mine, it may be directly classified as "illegal gatherings" or "outbound business development". In Hong Kong and other places, you should also pay attention to the use of commercial use places, and clarify the content of the activity to the owners or management agencies to avoid venue disputes due to the attributes of the "currency circle".

In addition to the above three links, the use of data and images is becoming a new high-risk area for compliance. Common behaviors such as audio and video recording, information collection of participants, and live social media broadcasts during the event may infringe on participants' portrait rights and privacy rights, and may even trigger compliance red lines in cross-border data flow scenarios.

Step 3: Activity review stage

After the event is completed, will everything be "good"? Lawyer Mankun believes: Not necessarily.

In actual law enforcement, many projects were eventually held accountable because of problems at the event site, but because of the "traces" left after the event. Especially in social media recording, data archiving and fund transfer, if handled improperly, it can easily become a breakthrough for subsequent investigations.

Therefore, lawyer Mankun reminds: A truly complete closed-loop compliance must include review management after the event is over.

(1) Are there any "compliance records" left?

After the event, the project party must organize and retain the following key materials to deal with possible investigations or inquiries:

• Guest speech, PPT or speech summary version;

• Live video/audio information (if recorded);

• The final draft and list of delivery channels of promotional materials;

• Register the basic information of participants (if there is a registration process);

• Contract documents such as site leasing, sponsorship agreements, etc.;

• Activity income and expenditure details, especially the description records involving the token part.

These materials are not for "active filing", but in the future, if they encounter compliance inquiries, they can help the project prove the compliance intention of the activity and the organizer has fulfilled the reasonable review obligation.

(2) Is there a "speech traceability" mechanism?

If modern currency-related content is released in the event, the organizer needs to do a good job of tracing the speeches and clarify which content is provided by whom and whether the speeches have been reviewed.

Especially in the part of the guest's independent speech, it is recommended to sign a responsibility statement or risk reminder letter before the event to clarify the legal responsibility of the guests for their own speeches, so as to avoid the situation where "guests cross the line and the organizer takes the blame."

In addition, whether the recorded content is publicly available should be planned in advance: which content can be disseminated in the public domain and which can only be archived internally. If the content involves token information, it should be evaluated for its possible legal impact on the dissemination of specific groups of people (such as mainland users).

(3) Is there a "post-event public opinion handling plan"?

Web3 activities are often accompanied by high exposure and community fermentation. An event that originally meant to be "internal communication" may have become a hot social media search because of a KOL's words.

In this scenario, the organizer should have basic response plans:

• Should the dissemination content related to the activity be monitored in a timely manner?

• If misleading statements or risky remarks occur, will they be clarified and removed from the shelves quickly?

• Can we speak out in a unified manner in the community and explain the boundaries of the compliance of activities?

If the spread is allowed to ferment and distorted descriptions such as "the organizer publicly preached projects" and "domestic promotion tokens" appear, then even if the activity itself is designed to comply with the regulations, it may step on the "secondary transmission".

Therefore, from the perspective of compliance, the "final" of the activity review stage also determines whether the risk closed loop of this activity is truly completed.

Summary of Lawyer Mankun

Holding a Web3 event is never as simple as process arrangement and guest invitations.

A truly safe offline activity is not about "nothing happens", but about designing legal and compliant into every link from the very beginning. The sooner you intervene in compliance, the more you can take the initiative and the more you can feel at ease to "go out".

Against the backdrop of increasingly tight supervision, every offline event of Web3 is actually a signal to the outside world, and the organizers and the event itself naturally become a window to take risks. You think it's just a cocktail party or a meeting up, but in the eyes of the supervision, it may be marketing, financing, and business development.

Therefore, for the organizer, the optimal path has always been "controlling the maximum risk at the minimum cost".

It can be foreseen that Web3 activities will become more and more diverse, and the institutional construction behind the activities has now begun.