Compliance Traps in Web3 Project Operations: Structural Design and Responsibility Allocation

In the Web3 space, many projects often fall into some common yet dangerous operational models in the pursuit of compliance. These models may seem capable of evading regulation, but in reality, they can pose greater legal risks. This article will delve into three typical high-risk operational structures and, through practical cases, help readers identify and avoid these potential compliance pitfalls.

"Outsourcing" Model: Responsibility Difficult to Truly Cut Off

Many Web3 projects adopt an "outsourcing" strategy, delegating core operations such as contract development, front-end maintenance, and marketing promotion to third parties, hoping to weaken their own operational attributes. However, the focus of regulatory agencies is not only on the contracting parties but also on the actual decision-makers and beneficiaries.

If regulatory authorities discover that the so-called third-party service providers have interests related to the project team, directive control, or personnel overlap, even if there are independent contracts, they may be regarded as an extension of the project party's operating unit. In this case, all responsibilities for relevant actions will fall on the project entity.

In the 2022 case where the U.S. Securities and Exchange Commission ( SEC ) sued Dragonchain, although the project established multiple legal entities and outsourced some operational tasks, the SEC found through its investigation that all key decisions were still controlled by the parent company of Dragonchain, thus the outsourcing structure failed to achieve liability separation.

The Hong Kong Securities and Futures Commission ( SFC ) has also made it clear when handling compliance investigations of certain virtual asset service providers that if the core operational and technical decisions are still controlled by the same actual controller, even if the business is executed by a "service provider," it will not be recognized as independently operated. This kind of "formal separation" arrangement may instead be viewed as negative evidence of an intentional evasion of regulatory obligations.

"Multi-Location Registration + Distributed Node" Model: Difficult to Conceal the Actual Control Center

Some Web3 projects choose to establish shell companies in countries with relatively loose regulations, while claiming to have global node deployment, attempting to create the impression of "decentralization." However, in reality, most of these structures still exhibit highly centralized control, with major decision-making power concentrated in the hands of a few core members, the flow of funds dominated by a single entity or individual, and key code update permissions held within one address.

Regulatory agencies are increasingly inclined to determine the actual control center of a project through "penetrative" identification. Especially when facing legal disputes or cross-border investigations, regulators prioritize tracing the "actual controller's location" and "the location of key activities" to establish jurisdiction. The technical deployment of distributed nodes does not obscure the essence of operations.

In the 2024 Williams v. Binance case, the U.S. Second Circuit Court ruled that as long as U.S. users purchase cryptocurrency tokens through the platform and the trading system's infrastructure is located in the U.S., U.S. law applies, even if the platform claims to have no U.S. entities. This indicates that U.S. regulators do not recognize the "stateless" claim, and as long as users and engineering activities are associated with the entity's control, regulatory scrutiny may apply.

The Monetary Authority of Singapore ( MAS ) and the Hong Kong Securities and Futures Commission ( SFC ) also emphasized in the relevant guidelines that overseas registration structures cannot prevent local regulatory authority from tracing back to the actual controllers.

"On-chain Publishing" Model: Not Equivalent to Unmanned Operation

Some technical teams believe that once a smart contract is deployed, the project is disconnected from it, viewing the code on the chain as "decentralized delivery." However, regulators do not accept this "technology equals exemption" perspective. On-chain is just a form; off-chain is where the substantive actions occur. Who initiates marketing, organizes placements, and controls circulation paths – these factors are at the core of regulatory judgment on the attribution of responsibility.

In 2024, American investors initiated a class action lawsuit against the Pump.Fun platform. Although the platform claims that "on-chain contracts are public," the lawsuit clearly states that marketing activities and KOL promotions are at the core of driving transactions. This indicates that regulators are not only focused on the code but also place greater importance on off-chain operations.

In February 2025, the SEC's Staff Statement reiterated that even "entertainment" meme tokens cannot be labeled as "exempt." As long as there is an expectation of wealth appreciation or marketing intervention, they still need to be assessed according to the Howey Test.

Global regulatory trends have become more consistent, with regulatory agencies in various regions such as the SEC, CFTC, Hong Kong SFC, and Singapore MAS strengthening the "behavior-oriented" judgment logic, focusing on the off-chain promotion and distribution paths as key review items. In particular, models of "incentive issuance" carried out through KOLs, airdrops, and exchange listings are almost all regarded as typical operational behaviors.

Conclusion: Focus on substantive control relationships, rather than superficial structures

In recent years, the logic of regulatory agencies has become increasingly clear: it's not about what structure a project has built, but rather about the actual operational methods and the beneficiaries involved. What Web3 projects truly need is not a complex stacking of structures, but a clear establishment of responsibilities and control boundaries. Instead of attempting to obscure risks through "structural games," it is better to establish a resilient and interpretable compliance framework from the very beginning. This is the correct way to reduce legal risks and achieve long-term sustainable development.