Babbitt Column | Is digital currency investment legal?

First, what is a proxy?

In general, the so-called proxy investment in the blockchain investment field is similar to the intermediary, that is, the “yellow cow” we usually call, they get the investment quota from the project party, and then use their own resources to further split these quotas. Sold to other small and medium investors. Since small and medium-sized investors can't directly contact the project side, the investment on behalf of the project becomes a communication bridge between the project party and the small and medium-sized investors. Of course, because of the information gap between the project party and the small and medium investors.

Second, what is the nature of the proxy?

On the one hand, the agent and the investor have a principal-agent relationship. According to whether the agent is a business, it can be divided into civil agents, that is, not based on investment, with occasional and non-professional; commercial agency, with investment on behalf of the industry, with regular and professional.

The agent of commercial agency nature is similar to the securities brokers in the traditional financial field. The so-called securities broker refers to the intermediary who accepts the client's entrustment, buys and sells securities on behalf of the customer and collects the commission. A securities broker engages in securities trading as an agent and is a principal-agent relationship with the client. The securities broker must follow the orders issued by the client to conduct securities trading and, at the best possible price, to execute the order; however, the securities broker does not bear the price risk in the transaction. Securities brokers provide services to customers to receive commissions as compensation.

The agent of a civil agency nature also includes two cases, namely, a prominent agent and a hidden agent. An anonymous agent, also known as an indirect agent, means that in the agency relationship, the agent is anonymous, and the agent directly signs the contract with the project party.

On the other hand, on behalf of investors and project parties, in fact, often have a stable business relationship, become the distribution channel of the project side, so they basically constitute an agency sales relationship.

China's "Securities Law" stipulates that the establishment of a securities company and the operation of securities business must be examined and approved by the securities regulatory authority under the State Council. No unit or individual may operate a securities business without the approval of the securities regulatory authority under the State Council.

3. Is it legal to make a proxy?

Since the investment involves multiple legal relationships, the question of whether the proxy is legal or not requires different situations to be analyzed. The analysis here is mainly for the legal responsibility of the investment, not the project itself.

If the project party is suspected of fraud or other criminal activity, and if it is known as the “underwriter”, it may constitute an accomplice.

If the agent invests in the distribution and adopts a similar spread through the QQ group and the WeChat group, the method of “human transmission” is adopted, which may be suspected to constitute “MLM”. If in the MLM organization, it is the organizer and leader, then it may be suspected of forming an organization to lead the pyramid scheme crime.

If the investigator uses the information difference to infringe the rights of the actual investor, the project party, or misappropriate funds, it may be suspected of illegally absorbing public deposits, misappropriating funds, fund-raising fraud, fraud and encroachment.

Of course, the above is only a brief analysis. Whether the act of acting on behalf of the crime constitutes an illegal crime, and whether it constitutes any illegal or criminal act, it must be combined with the specific facts of the specific case.

Author: Zhang Feng