Attorney Shao Shiwei | When a Web3 Project Involves Gambling, Do Technical Staff and Agents Commit the Crime of Operating a Casino? Can Ordinary Employees Also Be Sentenced?

What issues do case-handling personnel typically focus on?

From the perspective of case-handling personnel, they focus on three questions regarding an individual involved in the case:

First, if your role were removed, could the platform continue to operate normally?

Without you, can the platform still function properly? Is your work supporting a dispensable link, or is it ensuring the realization of core functionalities?

Second, are your actions helping to expand the scale of this business?

Are you performing routine technical maintenance, or are you helping the platform attract more users? Are your activities maintaining the platform’s operations, or promoting user growth?

Third, what information do you have access to in your daily work, and how much do you actually know about the platform?

What has been discussed in your work group chats? What data can you access given your position’s permissions? In your daily communications with the team, have you encountered facts sufficient to make you aware that the platform might have issues?

The answers to these three questions basically determine the direction of your case.

How are different behaviors distinguished and characterized when individuals participate in the same project?

In the cases I have handled, several typical scenarios generally emerge.

One category involves providing only a single type of technical support.

For example, outsourcing server maintenance or writing a specific, standalone piece of code, without participating in specific business operations or having access to the project’s overall operations. Upon completion of such tasks, there is generally no further involvement in subsequent matters.

In certain cases, this scenario leaves room for legal dispute. The key considerations are twofold: first, whether the work itself is neutral in nature; and second, the extent of the individual’s actual knowledge at the time.

Another category involves individuals who continuously work within the project.

They have a general understanding of the project’s purpose and are aware of potential issues, yet they continue their work.

For instance, wallet engineers responsible for the deposit and withdrawal pipeline;

operations and maintenance personnel who ensure system stability and uninterrupted transactions;

and KYC reviewers who facilitate user onboarding and account activation for the platform.

When viewed within the context of the overall business, these roles are readily characterized as assisting the platform in maintaining its operations.

A further category is directly linked to user growth.

The most typical example is agents who distribute links, recruit users, and develop downlines, earning commissions based on trading volume or betting amounts.

Such conduct is often directly characterized in many judgments as expanding the scale of operations. The more individuals recruited and the deeper the involvement, the greater the liability.

Even within the same project, individuals perform different tasks and occupy different roles, naturally leading to different outcomes.

Why are ordinary employees also held liable? The key lies in the specific work you performed.

Many clients emphasize: "I am just an ordinary employee; I do not handle core job responsibilities."

While this statement may be understandable to family and friends, it is not determinative in judicial assessment.

When handling a case, investigators do not first determine whether you are an employee or an owner. Instead, they first deconstruct the entire project into a complete business chain:

Where does the funding come from, and where does it go? Where do users come from, and how are they retained? Who maintains the overall system?

After this deconstruction, they reposition your role within the entire business chain to assess:

Wallet engineers correspond to funding channels. Without you, funds cannot flow in or out, and the business would cease operations.

Operations and maintenance personnel correspond to system assurance. Without you, the platform could go offline at any time, making transactions impossible.

KYC reviewers correspond to account management. Without you, users cannot register, and gamblers cannot gain access.

Agents correspond to user acquisition. Without you, where would traffic and user growth come from?

Once investigators establish this conceptual correspondence, the individual’s conduct may be interpreted as "providing assistance to gambling websites." This applies regardless of whether you signed an employment contract or a cooperation agreement, whether you received salary or commissions, and whether you worked for a virtual asset exchange or for related upstream or downstream platforms (such as digital wallet companies).

Why Do Cases Involving Employees Yield Different Outcomes?

Many clients ask: "We all worked for the platform, so why did some receive suspended sentences, others actual imprisonment, and still others face no prosecution at all?"

In practice, we assess two key factors: how closely an individual’s role is tied to funds, users, and systems, and the volume of information they routinely access. Taken together, these factors largely indicate the likely trajectory of the case.

Some individuals perform peripheral support functions and do not have access to core information;

others, although in technical roles, deal daily with deposits, withdrawals, and user data;

and still others are directly engaged in recruiting participants and conducting promotions, with their compensation or performance directly linked to the platform’s scale.

These distinctions lead to markedly different outcomes.

Why Can the Same Conduct Be Characterized Differently?

The same conduct may be characterized in entirely different ways by different investigators or prosecutors, or even by the same official under different interpretations:

Technical maintenance may be viewed as “outsourced services” or as “technical support for a gambling platform.”

Promotion and user acquisition may be understood as “marketing” or deemed “soliciting gamblers.”

Provision of servers may be explained as “equipment leasing” or evaluated as “providing a venue for gambling.”

This is also why the ultimate outcomes differ from case to case.

The key lies in how your conduct is characterized within the overall chain of activities. One of the core tasks of the defense is to strive for a more favorable "characterization of your role."

Where Lies the Scope for Defense

In defending against such cases, it is more important to address the following specific issues than to simply deny knowledge or participation.

First, how should your subjective knowledge be understood?

Can you clearly articulate what you knew and what you did not know? What were your sources of information? Was there any possibility that you were misled?

If you were informed upon hiring that the company was legitimate and only later discovered irregularities, this timing becomes crucial.

If there are significant differences between the tasks assigned to you in the early stages of the project and those you handled later, such discrepancies themselves can serve as an entry point for the defense.

Second, how should the role of your conduct be assessed?

Was your work a core component? Would operations truly have been unable to proceed without your involvement? Were there alternative arrangements? What was your position’s hierarchical level within the team?

These questions can help the defense seek findings of "minor role" and "lower status." Distinctions among accomplices often hinge on these factors.

Third, how should the nature of your conduct be legally characterized?

Are you providing technical services, or are you directly participating in business operations? Are you an outsourced service provider, or a co-operator? Do you receive fixed compensation, or revenue sharing tied to business volume?

These distinctions directly affect the legal characterization of the case. Even within technical roles, the assessment may differ significantly between outsourced development billed by project and full-time engineers deeply embedded in the team.

The defense in such cases essentially revolves around contesting the interpretation of facts: determining how your conduct is defined within the overall operational chain.

Issues Most Easily Overlooked in Such Cases

In defending against charges of operating a casino involving virtual currencies, the key lies in clearly articulating the facts that are sufficient to influence conviction and sentencing.

If the nature of your work, the information you accessed, and your position within the overall business are not clearly expressed, you risk being placed within a framework unfavorable to your defense.

Once such a framework is established, the scope for subsequent adjustment becomes increasingly limited.