How can Web3 conduct offline activities safely, legally and in compliance with regulations?

Authors: Iris, Lawyer Liu Honglin

In Web3, "organizing events" has become a standard action for almost every project. Do you want exposure? Do you want cooperation? Organizing and participating in events is definitely one of the best ways to solve these two problems.

I wonder if you have participated in the recent Web3 Festival in Hong Kong. In addition to the large summit at the main venue, the event also has a variety of surrounding activities, from cocktail parties, afterparties, technical salons, to meetups, closed-door meetings, hackathons, and forums. It can be said that the entire month of April in Hong Kong was very high in Web3.

However, many organizers think that holding an event is just about planning a process, inviting guests, finding a venue or platform, and doing publicity and promotion. It’s very simple!

But in fact, there are still many compliance issues in holding events, especially for Web3, which is an industry with financial attributes, technical characteristics and cross-border characteristics. The compliance risks of its offline activities are much higher than those of ordinary industries, and ignoring these compliance issues is often a taboo.

Therefore, in this article, Attorney Mankiw systematically sorts out common legal issues in Web3 activities and pragmatic response strategies from the perspective of event organizers, combining the actual hosting logic and actual operation points, to help project parties and operation teams truly "hold events legally and in compliance with regulations."

The three-step compliance logic for hosting an event

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

Therefore, the question that event organizers should really think about is: Have I done my best to fulfill my responsibilities and think about and control all potential risks in advance during the three stages of event planning, execution, and follow-up?

Step 1: Event planning stage

What kind of event are you going to hold? This is the first step in all compliance judgments.

When planning an event, many Web3 organizers often only focus on superficial labels such as "technology sharing" and "community gathering". However, from a regulatory perspective, the real key is the actual content and purpose of your event.

Are they promoting tokens? Are they organizing financing? Are they facilitating overseas platforms to expand their business in China?

These factors determine what compliance risk level your activity falls into, not what name you wrap it in.

Here, based on his personal experience and judgment, attorney Mankiw divides Web3 offline activities into three risk levels according to their substantive content:

Low risk activities

For example, purely technology-oriented Hackathons (such as ETHGlobal), R&D workshops, and closed-door developer exchanges. Such activities are centered on code and products, do not involve financing, do not promote tokens, and have a lower overall risk. However, it is also important to avoid using tokens for bonuses, connecting results to Token projects, and beware of the suspicion of "using technology to package tokens".

Medium risk activities

Usually, activities with the nature of "promotion" or "market warming" such as industry summits, press conferences, project Meetups, cocktail parties, etc. may seem like light social activities, but if the guest speech involves project currencies, the media follow-up is too enthusiastic, and the identities of the participants are complicated, it is easy to be questioned as "disguised marketing". Therefore, such activities require the organizer to carefully select participants, especially speakers; it is also best not to arrange KOLs in the cryptocurrency circle to host, so as to avoid the formation of 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 investor meetings, and token roadshows. Once this type of scenario is open to investors from mainland China, it is very easy to step on 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 limited to overseas licensed institutions/no currency involved), only provide information for overseas, and do not talk about "price expectations" or "investment returns" throughout the process, while retaining compliance backup records.

Many organizers may think: "My event is held in Hong Kong, how could there be a problem?" But please note: If your content or communication reaches users in mainland China, even if the venue is overseas, it may be considered by regulators as "providing services to domestic residents."

Therefore, the risk of an event does not only depend on where you hold it and what it is called, but also on what you say, who is listening, and whether the funds flow.

In addition, when it comes to foreign personnel, minors, or specific professional identities (such as financial practitioners), the laws and regulations of some regions require activity registration or specific permission. If these requirements are ignored, even if the activity itself is not illegal, you may be questioned or dealt with due to inadequate identity verification.

So, when planning an event, Attorney Mankiw recommends that you do three things:

1) Substantially classify the activity types to see the actual content and objectives;

2) Confirm the reach of the activity, especially whether it involves users in mainland China, sensitive countries and regions, or cross-border publicity;

3) Set a "content compliance line" in advance, that is, what words should not be said, what materials should not be sent, and who should not be invited.

Remember: you are not planning an activity process, but formulating a compliance behavior narrative. If you make the wrong classification, you may still make mistakes no matter how careful you are.

Step 2: Activity execution phase

Once the process is finalized, the next step is to enter the actual "implementation" stage. However, it is precisely at this stage that compliance issues are most likely to be triggered due to omissions in details.

Anyone who has organized an event knows that planning is one thing and execution is another. In reality, many problems are not caused by the planners, but by "accidentally touching the red line" during the execution process.

Attorney Mankiw summarized the key issues in the implementation phase of the activity into three links:

(1) Does the promotional content cross the line?

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

• “Coming soon/issuing tokens/listing”

• "Airdrop", "Pre-subscription", "X-fold Potential Coin"

• "XX investment institution leads the investment" and "well-known VC supports"

• Currency price prediction, profit expectation, and investment return description

Once these expressions appear, they may be identified by regulators as tendencies towards illegal financial activities such as "token sales promotion" and "fundraising from the public."

Therefore, it is recommended to set up a unified compliance review mechanism for promotional materials. It is best to have legal affairs or lawyers to assist in reviewing and prejudging all external posters, tweets, event manuals, guest PPTs, etc., and clarify which information is "only for private discussion and not for public discussion".

(2) Are there any risks in speaking on the spot?

In forums or meetups, the content of guest speeches is often out of control. But please note that as long as the event is organized by the organizer, the responsibility for its content may "fall back on you."

In practice, regulators often do not only look at whether the organizer "personally promotes". As long as you are the organizer of the event or the hosting platform, whether the guests "reveal" on the spot, the token roadmap appears in the PPT, or the token trading opportunities are hinted in the interview, the regulator may determine that you have failed to fulfill the content review obligations and thus bear joint risks.

Another typical "compliance hidden danger" is indirect support for overseas platforms or services. For example, a project arranged platform representatives to speak, QR code jump registration, technology product embedded demonstrations, etc. Although the organizer did not directly involve currency or provide a trading entrance, because it "provides convenience for overseas platforms to conduct business in China", it may eventually be characterized as assisting illegal financial activities.

Therefore, the event organizer must review the guest speech content in advance and remind the guest speakers on the spot, especially when sharing about currencies, platforms, and projects, to be careful not to guide investment, show trading logic, or hint at price trends. At the same time, during the speech, the venue should be controlled as much as possible.

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

Don’t underestimate the compliance sensitivity behind “collecting tickets” or “accepting sponsorship”. The compliance of collecting tickets with crypto assets and accepting token sponsorship varies greatly in different regions. For example, in strictly regulated regions such as mainland China, regulators have repeatedly emphasized that virtual currencies cannot be used as payment tools. If an event charges fees through tokens such as USDT, it may be regarded as providing virtual currency payment services, and thus be classified as “illegal financial activities.”

Even in relatively open regions such as Hong Kong and Dubai, if the sponsor is an unlicensed overseas trading platform, crypto investment institution or other sensitive entity, the event organizer may be considered to be "assisting unlicensed virtual asset service providers in conducting business", especially when the event content includes project promotion, brand exposure and other aspects, the risk is even higher.

At the same time, the selection of event venues also has compliance standards, such as whether the event venue is legal and open to the public? Is temporary filing required? Has the number of participants exceeded the upper limit? Are there overseas participants or representatives from 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 the thunder, they may be directly classified as "illegal assembly" or "overseas exhibition". In Hong Kong and other places, it is also necessary to pay attention to the use of commercial venues and clarify the content of the event to the owner or management agency to avoid venue disputes caused by the "cryptocurrency circle" attribute.

In addition to the above three links, the use of data and images is becoming a new high-risk area for compliance. Common activities such as full-time audio and video recording, participant information collection, and social media live broadcasts may infringe on the portrait rights and privacy rights of participants if they are not authorized or informed of their purpose, and may even trigger compliance red lines in cross-border data flow scenarios.

Step 3: Activity review stage

Is everything all right after the event is over? Lawyer Mankiw believes: not necessarily.

In actual law enforcement, many projects are not due to problems at the event site, but because of the "traces" left after the event. In particular, social media records, data archiving and sponsorship fund transfers, if not handled properly, can easily become a breakthrough point for subsequent investigations.

Therefore, Attorney Mankiw reminds: A truly complete compliance closed loop must include post-event review management.

(1) Are there any “compliance records” kept?

After the event, the project owner must organize and retain the following key materials to respond to possible investigations or inquiries:

• Guest speech manuscript, PPT or speech summary version;

• On-site video/audio material (if recorded);

• Final version of promotional materials and list of distribution channels;

• Registration of basic information of participants (if there is a registration link);

• Contract documents such as venue leasing and sponsorship agreements;

• Details of the income and expenditure of the activity, especially the description and record of the part involving tokens.

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

(2) Is there a “speech tracing” mechanism?

If token-related content appears in the event, the organizer needs to establish a speech traceability mechanism to clarify which content is provided by whom and which speeches have been reviewed.

Especially for the part where guests give independent speeches, it is recommended that they sign a statement of responsibility or a 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 "the guests cross the line and the organizer takes the blame".

In addition, whether the recorded content will be made public must 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, the possible legal impact of its dissemination to specific groups of people (such as mainland users) must be evaluated.

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

Web3 activities are often accompanied by high exposure and community fermentation. An activity originally intended as an "internal communication" may become a hot search on social media because of a certain KOL's words.

In this scenario, the organizer should have a basic response plan:

• Is the communication content related to the activity monitored in a timely manner?

• If misleading statements or risky remarks appear, will they be clarified and removed promptly?

• Is it possible to speak with one voice in the community and clarify the compliance boundaries of activities?

If the spread of information is allowed to ferment and distorted descriptions such as "the organizer publicly promotes the project" and "tokens are promoted domestically" appear, then even if the event itself is designed to comply with regulations, it may fail in "secondary dissemination".

Therefore, from a compliance perspective, the "closing" of the activity review phase also determines whether the risk loop of the activity is truly completed.

Attorney Mankiw's Summary

Hosting a Web3 event is never as simple as arranging the process and inviting guests.

A truly safe offline event does not rely on "no accidents" but on designing legality and compliance into every link from the beginning. The earlier you get involved in compliance, the more you can take the initiative and the more confident you can be when "going out".

In the context of increasingly tighter regulation around the world, every offline event of Web3 is actually a signal released by the project to the outside world, and the organizers and the event themselves naturally become windows for taking risks. You may think it is just a cocktail party or a Meetup, but in the eyes of regulators, it may be marketing, financing, or business development.

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

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