Many KOLs may wonder: I never touched investors' money, never set up a group, never launched a token offering; I merely accepted a promotional fee from a project team and posted one tweet or recorded one video. How did I become an accomplice to illegal fundraising?
KOLs with tens of thousands of followers, who charge several thousand USDT per post and endorse and vouch for new projects, have one of the few stable sources of income during a cold market.
They generally hold a line of defense in their minds: as long as they do not collect client funds on behalf of others and do not promise returns, the risk will not reach them. However, before a judgment, this line of defense sometimes does not hold.
I. Once You Take the Money, You Are No Longer a Bystander
The crime of illegally absorbing public deposits has four characteristics: illegality, openness, inducement, and sociality. The project team satisfies all four; a KOL appears to touch only the element of public promotion.
However, Article 4 of the 2014 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 Handling Criminal Cases of Illegal Fundraising removes this false sense of safety:
Where a person provides assistance to another in illegally absorbing funds from the public and collects fees such as agency fees, benefit fees, rebate fees, commissions, or kickbacks therefrom, and this constitutes a joint crime of illegal fundraising, criminal liability shall be pursued in accordance with law.
This does not mean that endorsing a project necessarily constitutes a crime, but when this provision is applied to a KOL's daily business, it is easy to cross the line. Followers are unspecified members of the public; a tweet is the most typical form of public promotion; and the promotional fee of several thousand USDT is precisely the commission or kickback named in the judicial interpretation. To put it plainly: the project team sells tokens, while the KOL sells trust.Money flows from followers' pockets to the project team's wallet, with the KOL building bridges and paving roads in between; the toll for building the bridge may constitute that joint criminal liability statement.
There is another, more subtle point: Article 2 of the Opinions makes clear that where a person knows information about fundraising is spreading to the general public and allows it to continue, that too constitutes public promotion to society. When fans repost on their own initiative and communities multiply through layer upon layer of sharing, as long as you do not stop it, the law treats it as if you were promoting it yourself. At that point, the reach that a KOL is most proud of, if placed in the case file, is called allowing dissemination to continue.
II. Three Bills: The Deeper the Participation, the Longer the Bill
The criminal risk for KOLs is not one-size-fits-all; rather, it is layered according to depth of participation. Looking at publicly available judgments from recent years, three categories of liability can be identified, each longer than the last.
Category One: Those who take money to endorse
In the illegal absorption of public deposits case of Wang tried by a Xinjiang court [(2021) Xin 4002 Criminal First Instance No. 124], the defendant did not establish a platform or handle funds; what he did was build hype for high-return projects: holding promotional meetings and sending bulk text messages to advertise projects such as "Yingtai virtual shares" and "CCL virtual currency." Twenty-nine people followed and invested approximately RMB 4.94 million. The court ultimately found that the elements of illegality, public solicitation, social harm and inducement were all present, convicted him of the crime of illegally absorbing public deposits, and sentenced him to five years and six months of fixed-term imprisonment.
The point of this category is:Promotion itself can constitute a standalone crime; you do not need to touch the money, you only need to speak for those who do。
Category Two: Those deeply involved
In the second-instance "Californium Coin" fund-raising fraud case of Xia and others heard by the Zhejiang Provincial Higher People's Court [(2020) Zhe Criminal Final No. 9], the nature was one level more serious. Xia and others knew that the Energy Californium platform had no actual operations, yet still recruited investments through offline promotional meetings and word of mouth under the claim of "guaranteed profits without losses." They were not the type to leave after posting a tweet: the team developed the "Californium Wallet" app to enhance the project's credibility, coordinated with the platform to artificially drive the price of Californium Coin from USD 16 to USD 33, creating the illusion that it could only rise and never fall; set withdrawal cycles to lock up funds; and after tighter policy triggered a run, coordinated with a dump to USD 0.6, causing investor losses in the hundreds of millions. The outcome was the crime of fund-raising fraud.
Illegal absorption of public deposits carries a maximum of fifteen years, while fund-raising fraud carries a maximum of life imprisonment. Endorsing for others makes one an accomplice; trading on behalf of others makes one a principal offender. The people in this case had already reached the level of trading operations; it was not as simple as posting a tweet. Once endorsement is mixed with operations, the weight of the charge follows the degree of participation.
Category Three: Those who lead trades themselves
The third type is the most common and also the most dangerous: KOLs no longer call trades for project teams but open their own communities and act as "trade-leading teachers." This path has two forks.
The fraud case of Yang, Zhou and others [(2020) Wan 0603 Criminal First Instance No. 435] took the first fork: the group used virtual currencies such as ICCT, SIT and SDS as a pretext, with trade-leading teachers hyping upside potential and claiming they would help investors achieve wealth transformation; once victims' investments reached the target amount, they manipulated the coin price into a cliff-edge drop, creating the illusion of losses and misappropriating the principal. The persons involved were sentenced to fixed-term imprisonment ranging from three to six years for fraud.
The other fork is a Ponzi scheme. In the second-instance case of Chen and others heard by the Bozhou Intermediate People's Court of Anhui [(2025) Wan 16 Criminal Final No. 12], after trade-leading incurred losses, they did not disclose this to clients and used funds from new investors to pay principal and interest to old investors. The court held that objectively they had no possibility of repaying principal and interest, found that they had the purpose of illegal possession, convicted them of fund-raising fraud, and sentenced them to nine years and six months of fixed-term imprisonment.
Two forks lead to the same lesson: selling tokens on behalf of others earns you a commission; collecting funds yourself and leading a group makes the account a pool of funds; the former makes you an accomplice, while the latter puts you directly in the front row of the defendants' dock.
III. Key Defense Points: Four Defense Battlegrounds in Such Cases
When trouble actually arises, where does the room for defense lie? Based on the structure of such cases, there are four defense points.
First, subjective knowledge.
The 2019 Opinions of the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security established the comprehensive determination rule: professional background, promotional content and fee-charging models are all bases for determining knowledge. These bases, in turn, are also defense points; if the client fulfilled verification obligations, had no access to the project's core materials, and did not participate in designing return promises, there are factual footholds for arguing lack of knowledge.
Second, the defense on the charge.
The sentencing gap between illegal absorption of public deposits and fund-raising fraud is fifteen years versus life imprisonment. The direction to hold firmly is the purpose of illegal possession: where there is a real project, funds are used for operations, and there is no squandering or transfer, the allegations must be dismantled item by item.
The dispute over characterization is often the most valuable battle in such cases.
Third, the defense of principal versus accessory.
Promoters are usually in a subordinate position in a joint crime: they do not control the funds, do not decide the model, and their gains are only a fraction.
The determination as an accessory directly affects the sentencing range, and this battle must be fought.
Fourth, disgorgement of commissions.
Article 4 of the 2014 Opinions is clear: where fees can be refunded or paid back in a timely manner, a lighter penalty shall be imposed in accordance with law; where the circumstances are minor, the penalty may be waived.
This is a leniency channel unique to KOL-type cases and written into the judicial interpretation: the U voluntarily returned before judgment and the U recovered or disgorged after judgment receive entirely different legal treatment.
A lawyer's perspective: risk reminders for practitioners
Three reminders for all crypto-industry KOLs: do not promise returns, do not collect funds on behalf of others, and do not accept payment to endorse projects whose qualifications cannot be verified.
If all three are observed, calling trades is merely an opinion; if any one is breached, the opinion becomes evidence.
The regulatory trend is also tightening: a February 2026 notice by eight departments expressly provides that internet platforms may not provide marketing and promotional services or paid traffic referral for virtual currency, and in July Shenzhen already banned a batch of crypto-related self-media accounts. Word of a crackdown reaches the platforms first and then individuals, and it never takes long.
