In the field of cryptocurrency investment, crypto investment sharing communities have become one of the important channels for investors to obtain information. They often follow group owners (such as KOLs) through social media and join the Web3 investment groups they create to get the latest cryptocurrency trends and investment analysis in a timely manner. However, many of these communities set substantial entry fees. Therefore, a new type of cryptocurrency information sharing model, 'paid information transfer groups,' has emerged - users can enter the group and obtain high-quality crypto investment information transferred by the group owner for a very low entry fee.
It seems that there is nothing wrong with the operation of information transfer. However, in reality, there are quite a few legal compliance issues that the group owner needs to pay attention to.
What is a paid transfer group?
The group owner/operator of the paid information transfer group in the cryptocurrency circle (hereinafter referred to as 'cryptocurrency transfer group') usually claims to have subscribed to multiple high-value paid communities in the cryptocurrency circle and can use the 'keyword capture' function of bots to transfer internal information from other paid communities in real-time. 'One entry fee for multiple group information' indeed attracts a lot of paying members.
The operational model of these cryptocurrency transfer groups usually includes the following characteristics:
Multi-source integration; the information within the group may come from multiple paid communities, covering various fields such as Web3 market news and player investment analysis.
Automated transfer; many community group owners will use bots to set keywords for automatic capture and forwarding of information from target communities.
Real-time updates; because they use bots for automated capture and forwarding, these groups are often considered capable of timely transferring cryptocurrency information.
Low-price strategy; group owners often emphasize that membership fees are much lower than the fees of the original information source community, such as 'spend a few hundred USDT to experience a strategy worth over 20,000 USDT.'
Value-added services; in addition to forwarding information, some community group owners will also provide simple interpretations or suggestions in an attempt to create additional value for users.
Taking a certain promotion transfer group as an example, the platform claims to have paid for membership in more than 30 top paid quality communities and provides group members with multidimensional information including but not limited to contract trading, spot market conditions, and short selling strategies through bots that sync information 24 hours a day.
What group owners in the cryptocurrency circle need to know
The characteristics of the paid information transfer groups in the cryptocurrency circle can usually attract a large number of Web3 investment users to pay for membership, achieving a win-win situation for users and group owners. However, Lawyer Mankun believes that during this process, the group owners in the cryptocurrency circle must also pay attention to some legal compliance issues, such as the article previously published by Mankun Law Firm (Operating TG Telegram Group Actually Results in Sentencing! How Should Web3 Communities Operate in Compliance?), which has analyzed the compliance issues related to charging cryptocurrency membership fees and providing investment advice. Meanwhile, as the owners of paid transfer groups in the cryptocurrency circle, they need to focus on the following aspects:
(1) Information transfer infringement issues
In the model of paid information transfer groups, one issue that cannot be avoided is the infringement of the intellectual property rights of other KOLs.
KOLs usually enjoy copyright for their original content published in paid communities, such as in-depth market analysis, exclusive project evaluations, etc., which are protected by intellectual property laws. Moreover, from the community rules and daily statements of KOLs, most paid communities clearly prohibit members from disseminating information from within the group, which can also be seen as a further protection of KOLs' copyright.
In this case, the community group owner has copied and disseminated unauthorized original information for profit, which not only violates the service contract with the original community KOL but may also constitute an infringement of intellectual property rights, being held accountable by the corresponding KOL.
Moreover, operating one’s own community by transferring the paid content of other communities may also be regarded as an unfair competition behavior using means that infringe on trade secrets, violating laws and business ethics, thus harming the legitimate rights and interests of the original creators.
(2) Lack of information review issues
The owners of transfer groups also need to consider the authenticity and accuracy of group messages.
The paid model of transfer groups determines that group owners and members are not simply 'netizens,' but have established a service relationship between each other: members pay entry fees, and group owners periodically release cryptocurrency investment news. Therefore, community group owners should ensure service quality and avoid releasing false or erroneous information that misleads group members.
However, most transfer groups use automated tools to capture information, making it usually difficult to review each piece of information. This leads to a situation where, if members invest based on this unverified information and suffer losses, the community group owner may face certain legal compliance issues:
Breach of contract issues; if members suffer investment losses due to reliance on false or erroneous information, the group owner may be deemed to have breached the contract and face the risk of civil liability for damages.
Fraud issues; if the community group owner knows that the information may have problems but continues to spread it, they may even be regarded as committing fraud.
Regulatory penalties; in certain cases, if the spread of false information has severe negative impacts, it may attract the attention and penalties of regulatory authorities.
(3) Project promotion issues
In addition, many transfer groups will also accept promotional invitations from Web3 project parties to promote specific projects within the group.
According to Article 148 of the Civil Code, if the group owner's false statements lead investors to have misconceptions and purchase tokens or participate in projects, resulting in property losses, their behavior will constitute civil fraud, and investors have the right to claim compensation.
More seriously, if the group owner intentionally illegally occupies the investor's property and uses deceptive means to obtain the investor's funds from the project party, ultimately causing property losses to the investor, their behavior is very likely to violate Article 266 of the Criminal Law, constituting fraud and bearing criminal responsibility.
Lawyer Mankun summarizes
As an emerging information dissemination model, paid information transfer groups in the cryptocurrency circle, while becoming an important avenue for community group owners to develop members, also bring significant legal compliance issues that cannot be ignored. Therefore, cryptocurrency transfer group owners should recognize the legal boundaries of their actions. Lawyer Mankun suggests taking the following measures for standardized management:
Obtain authorization; establish formal cooperative relationships with KOLs or community group owners of original content to obtain explicit authorization for content reproduction.
Clearly label the source. For reprinted or cited content, be sure to clearly label the original author and source, respecting the intellectual property rights of the original creators.
Strengthen information review; manually review information captured by bots to ensure the authenticity and reliability of the information.
Clearly state disclaimers; explicitly state disclaimers in group rules, reminding group members to judge the authenticity of information on their own.
Compliance promotion; when promoting projects, conduct compliance investigations on the projects and avoid exaggerating promotions or promising returns to ensure the objectivity of promotional content.
The emergence of paid information transfer groups reflects the market's demand for high-quality, low-cost information. However, while enjoying convenience, both community group owners and members should be aware of potential legal compliance points and jointly maintain a healthy and compliant information exchange environment. If any issues arise in the creation or operation of paid transfer groups in the cryptocurrency circle, please promptly contact a lawyer for compliance consultation.
