On February 6, 2026, eight departments, including the People's Bank of China and the China Securities Regulatory Commission, jointly issued the "Notice on Further Preventing and Handling Risks Related to Virtual Currency" (hereinafter referred to as the Notice 2.6), which caused quite a stir in the industry and made many practitioners feel the continued high pressure from the policy level once again.
Author: Lawyer Shao Shiwei
Original Title: Policy Interpretation: With Intensified Regulation, Where Should Domestic Web3 Practitioners Go? Criminal Risks of New 2026 Regulations for Web3 Practitioners, Crypto KOLs, and OTC Merchants
On February 6, 2026, eight departments, including the People's Bank of China and the China Securities Regulatory Commission, jointly issued the "Notice on Further Preventing and Handling Risks Related to Virtual Currency" (hereinafter referred to as the Notice 2.6), which caused quite a stir in the industry and made many practitioners feel the continued high pressure from the policy level once again.
The issuance of this notice continues the established regulatory pace—from the People's Bank of China-led coordination mechanism meeting on combating virtual currency trading and speculation in November 2025, to the joint risk warning issued by seven associations on December 5, 2025, to prevent illegal activities involving virtual currencies. The successive statements from multiple departments in a short period also signify that the regulatory stance is still being further refined and implemented.
Based on years of practical experience handling Web3 and cryptocurrency-related criminal cases, Attorney Shao would like to discuss in a more pragmatic way what impact these policies will have on three groups of people in China when they are implemented in practice.
1. Web3 practitioners working remotely within China, including employees providing technical, operational, and marketing support to Web3 projects, cryptocurrency exchanges, wallet projects, and on-chain tools;
2. Crypto KOLs , self-media and community organizers, including roles such as order placement, investment guidance, publicity and promotion, and community promotion;
3. OTC merchants (U merchants) , including those engaged in over-the-counter USDT trading, currency exchange channels, collection and payment services, and acceptance matching.
Web3 professionals working remotely within the country
Within China's Web3 workforce, those providing services to cryptocurrency exchanges constitute a significant proportion. Despite continuous policy crackdowns and shutdowns of cryptocurrency exchanges in recent years, the saying "where there's a will, there's a way" holds true. The abundance of remote work job postings, job application experience sharing, and even displays of wealth on platforms like Bilibili, Xiaohongshu, BOSS Zhipin, and Maimai clearly demonstrates the still substantial scale of those providing remote support to cryptocurrency exchanges and Web3 projects in China.
Employees of cryptocurrency exchanges who work remotely within the country are typically distributed across multiple key positions:
- BD/Business Development is directly responsible for market expansion and user acquisition;
- Marketing/Brand is responsible for advertising placement, commercial displays, and channel partnerships;
- Community operations are responsible for providing online business venues , organizing community activities, and maintaining user activity.
- Listing managers participate in token listing and project selection;
- The product manager is responsible for designing transaction products and formulating rules;
- Technical, development, testing, and operations personnel provide underlying technical support for the platform's operation.
Although these positions have different responsibilities, they all work together to help overseas virtual currency exchanges expand their market share and increase their user base and market share in China.
According to Notice 2.6, individuals within China who knowingly assist overseas entities in illegally providing virtual currency-related services to China should be held legally accountable. Recent judicial practice concerning virtual currency exchanges shows that when the actual controller or core decision-making body of an exchange is located overseas, those first to be criminally investigated are often exchange employees still in China providing remote support.
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Policy and legal risks of monetization models for crypto KOLs
Besides Web3 professionals working remotely within China, crypto KOLs are also a significant group involved in the domestic cryptocurrency ecosystem. These KOLs are typically active on platforms such as Xiaohongshu, Bilibili, Douyin, Twitter (X), and Telegram, providing trading guidance (recommending cryptocurrency transactions) through video explanations, market analysis, live streaming interactions, and community- shill.
From a business model perspective, the main monetization paths of crypto KOLs can be roughly summarized into the following categories:
One is transaction rebates (commission sharing) . KOLs earn commission income through referral rebates, node programs, and other methods. Public reports show[i] that in the node program of a leading exchange, the commission rebate rate for invited users' transaction fees can reach up to 40%, and some teams even have daily commission income exceeding 100,000 yuan.
Second, there are referral rewards . Typical practices include: receiving a USDT rebate card for each user you invite to deposit funds; receiving additional rewards when the invited user completes trading tasks; and being able to upgrade to a "node" after reaching a certain number of referrals, enjoying a higher rebate rate.
Thirdly, there are fixed promotion fees . KOLs create promotional videos, AMA events, reviews, or tweets for exchanges, and the pricing is based on their number of followers and influence, with single collaboration fees ranging from several thousand yuan to hundreds of thousands of US dollars.
From a legal perspective, the aforementioned behaviors are often considered as providing information intermediaries, pricing references, marketing promotions, or paid traffic redirection for virtual currency transactions.
According to regulatory documents such as Notice 2.6, domestic policies explicitly prohibit providing information intermediary and pricing services for virtual currency transactions, and also require internet platforms not to provide support such as marketing promotion, paid traffic redirection, commercial display, or online business venues. This means that the business and revenue models of the aforementioned crypto KOLs inevitably face policy and legal risks.
2.6 Article 18 of the Notice further clarifies that if a domestic individual knowingly or should have known that a foreign entity is illegally providing virtual currency-related services to the domestic population, and still provides assistance, they will be held criminally liable if their actions constitute a crime.
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What are the legal risks associated with crypto KOLs promoting projects?
Is it legal for crypto KOL to offer commissions for recommending products?
OTC Merchants (U Merchants): When stablecoins are classified as foreign exchange...
According to Notice 2.6, in addition to reiterating that virtual currency-related business activities are illegal financial activities and that virtual currency exchange, information intermediary, and pricing businesses are prohibited, it also mentioned that " stablecoins have indirectly fulfilled some of the functions of legal tender ."
This inevitably brings to mind a previous case from the Dapu District Court (see image below). In that case, the court determined that the defendants bought Tether (USDT) from retail investors and then resold it to profit from the price difference . The court ultimately ruled that the defendants, Chen and Li, were guilty of illegal business operations by using the guise of trading virtual currency to engage in disguised foreign exchange trading. Furthermore, this case was subsequently reprinted by the Guangdong High Court, indicating that it was recognized as a significant precedent by a higher-level court and may be referenced by other law enforcement agencies in similar cases in the future.
If future judicial interpretations become stricter, treating stablecoins (especially USDT) as "foreign currency" in certain cases and classifying OTC trading as "disguised foreign exchange trading," then not only stablecoin merchants but also some ordinary users' one-way buying or selling activities may be subject to criminal risks. Consequently, cases like this in the Tai Po Court will likely become increasingly common.
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In conclusion
The continuous issuance of documents by regulatory authorities has clearly conveyed a strict and stringent stance against virtual currencies and related activities. Based on the latest policies, this article focuses on Web3 practitioners working remotely within China, crypto KOLs, and OTC merchants (U-merchants), analyzing the high levels of criminal legal risks they may face under the current regulatory environment and providing a risk warning.
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