Last time, Lawyer Mankiw mentioned that there was a wave of people advocating RWA (Real World Assets) on domestic social media. "RWA is the code of wealth" and "Invest in RWA, and you will be financially free in three years". From Douyin to video accounts, from WeChat groups to offline lectures, everyone is talking nonsense. There are those who are trying to attract attention and earn fans, those who sell courses, and those who are pimps, but the most "deemable" ones are those who use the RWA concept to engage in capital trading. Today, let's talk about these people, uncover their true colors, and remind the elderly to keep their eyes open and protect their pensions!
RWA is broken, and the five-piece fund set is launched
This lawyer has been watching so many videos recently that his eyes are almost blinded. There are N accounts that brag about the "RWA token" every day. When I clicked on them, I saw that it was not a real RWA at all. They just named their own air coin "RWA" and started to use the concept crazily. What "empowering the real economy", "combining the virtual and the real", "the future of blockchain", etc., are all very confusing. What's even more outrageous is that the style of these video accounts is simply the "standard configuration" of Ponzi schemes:
1. Small whiteboard: A "lecturer" dressed in formal attire, draws on the whiteboard with a marker, calculating revenues and drawing structures, making it seem like a real thing.
2. Red banner: On the background wall are hung large words such as “Web3 Wealth Summit” and “RWA Global Ecosystem Conference”, with white letters on a red background, as festive as Chinese New Year.
3. Display board: The whole wall is covered with “Project Introduction” and “Global Layout”, all in English and terminology, almost covering all four walls.
4. Money detector + cash: There is a money detector on site, and stacks of red banknotes are next to it, suggesting that "you can earn so much if you invest."
5. There are a group of old men and women sitting downstairs, their eyes full of "hope of getting rich quickly". In this scene, you decide whether to open the door or not! Lawyer Mankiw's many years of experience in handling cases tells me that this is not a Ponzi scheme. I ate my keyboard!
The following are some live pictures from the video account, let’s take a look:
(The above pictures are all from WeChat video account, please check them out)
Cutting leeks under the guise of "Web3 evangelist"
The names of these accounts are more deceptive than the others, such as "Web3 evangelist", "RWA evangelist", "blockchain wealth mentor". These words are almost ruined by them and almost become derogatory words. They also like to call themselves "industry pioneers" and boast that they have "deeply worked in blockchain for ten years". But if you check, blockchain was not popular ten years ago. What did you work on? Did you work on P2P?
What’s even more ridiculous is that the introduction on their video account homepage is all “leading everyone to embrace Web3” and “RWA is the future trend”. When you click on the video, it’s all brainwashing:
First, a bunch of incomprehensible terms are introduced, such as “pledge”, “compound interest”, “smart contract”, and “algorithmic supply and demand balance”. Anyway, the grandpa and grandma will only remember one sentence after listening to them - “you can get rich overnight if you invest”.
I’ll give you another “once-in-a-lifetime opportunity” to tell you that “RWA is the ultimate form of blockchain, and you will regret it for the rest of your life if you miss it.”
Finally, there is a "limited time offer", such as "Invest 10,000 now and get 5,000 tokens" and "30% commission for recruiting people", which is a blatant pyramid scheme.
Brother, how can it be so good? The real RWA is a serious financial product, involving asset securitization and compliance supervision. How can you be here to promote it offline? These "evangelists" don't understand RWA at all. Their "ecosystem" is a Ponzi scheme that specifically targets the pensions of the elderly.
Why do they only target the elderly? Because young people are not easy to deceive.
Have you noticed that the audiences of these Ponzi schemes are mostly elderly people? Why? Because they can’t fool young people! Today’s post-95s and post-00s are very good at Web3 and meme coins. They can easily find out whether a project is a virtual coin by simply looking up the contract address and doing some research. Do you want to attend offline lectures with them, deposit money with cash, and get commissions by recruiting people? Sorry, they have already gone to the chain to get airdrops.
The elderly are different. They are completely confused about the concepts of blockchain and Web3. When they hear the high-sounding words "RWA" and "Web3", they only have four words in their minds: they can make a lot of money. They don't know how to check white papers or look at the data on the chain. They just believe the lecturer's random pie. Not to mention that these funds are particularly good at "sentimentalism", such as "investing in RWA is to save wealth for future generations" and "not investing is out of touch with the times". Once the elderly get excited, they will take out their pensions.
I have to be fair: the elderly are not stupid, they just trust the "experts" too much. Unfortunately, these "experts" are either stupid or bad, and they specifically take advantage of information asymmetry to fleece the elderly. Don't they feel guilty?
The routine of the capital pool: three tricks + pyramid scheme flavor
The tactics of these funds that try to take advantage of the RWA concept can be summarized into three methods:
Build hype: First, blow up RWA into "the ultimate outlet for blockchain", confuse you with a bunch of high-sounding terms, and then tell you that "now is your last chance to get on board".
Painting the pie in the sky: Calculating returns for you, they often say “annualized 50%” or “doubled in half a year”, and they also bring out a bunch of “success stories”, but in fact, they are all Photoshopped or data adjusted in the background.
Requiring orders: limited-time discounts, commissions for recruiting people, team dividends, and a blatant pyramid scheme that forces you to pay quickly and bring in relatives and friends to "get rich" together.
What's even more disgusting is that they also like to do "offline experience". They rent a hotel conference room, put out a money detector and cash, and find a few people to shout on the spot "I invested 100,000 and I have earned 500,000". When the old men and women see it, their blood heats up and they immediately pay. Brother, this is not called investment, this is called falling into a trap!
The "RWA tokens" of these Ponzi schemes have no underlying asset support at all. Real RWAs, such as those issued in Hong Kong, have financial products in the middle layer and valuable and profitable assets at the bottom layer, with clear cash flow and regulatory endorsement. You can't even clearly explain what real projects your tokens are invested in. How can you empower the real economy? With your mouth?
How “punishable” is it to run a Ponzi scheme? Let’s calculate how many years you can be in prison
As a lawyer with a sense of justice, what I hate most is this kind of blatant Ponzi scheme. Don’t think that no one will care if you put on the vest of “RWA”. Issuing and promoting virtual currency in China, especially Ponzi schemes, touches the red line of the law. Let’s take a look at what crimes these people may have committed and how many years they will be sentenced:
1. Crime of illegally absorbing public deposits
Don’t think that you can package illegal fund-raising as “financial innovation” by booking a conference room in a five-star hotel and hiring a few actors in suits. According to the judicial interpretation of the Supreme People’s Court, illegal absorption of public deposits is constituted if the following four characteristics are met at the same time:
Illegality: Not approved by the financial regulatory authorities in accordance with the law
Publicity: Publicize to the public through media, promotion meetings, etc.
Inducement: Promise to repay principal and interest or pay returns
Social: Raising funds from unspecified objects
Those “RWA evangelists” who are frantically swiping the screen in the video accounts, which one of them is not shouting “principal and interest protection”, “static income” and “dynamic rewards” to the camera? Some even held meetings in community activity centers to demonstrate how to exchange RMB for U.S. dollars. This is like dancing street dance with the "four qualities" standards engraved on their foreheads.
According to the latest sentencing standards, if an individual illegally absorbs more than 1 million yuan in public deposits, or if the number of people involved exceeds 150, he or she will face a prison sentence of more than three years but less than ten years. Those who organized the "100-city linkage" and "10,000-person conference" are likely to spend the rest of their lives in prison.
2. Fund-raising fraud
If illegally absorbing public deposits is "running wildly with eyes blindfolded", then fund-raising fraud is "running wildly with a knife" - the core difference lies in whether there is "illegal possession purpose". Attorney Mankiw teaches you three ways to identify:
Check the flow of funds: Did the money go into personal accounts or corporate accounts? Was it squandered or transferred?
Check the authenticity of the project: Are there any verifiable underlying assets? For example, real estate, equity, supply chain documents and other physical objects or rights certificates?
Look at the team background: Does the founder dare to show his face? Does he dare to use his real name? Does he dare to publicly disclose his business license and financial license?
Those who run the "RWA Ponzi scheme" write project white papers that are even more perfunctory than elementary school students' essays. Their team introductions are all about titles such as "blockchain experts" and "elites returning from Wall Street." They don't even dare to post a real photo. What's even more ridiculous is that the so-called "empowerment of the real economy" is just renting a shared office to pose for photos. What's the difference between this and e-zubao renting the Diaoyutai State Guesthouse for meetings?
According to the Criminal Law, if the amount of fund-raising fraud is extremely large (more than 5 million), the maximum sentence is life imprisonment. Those who deceived the elderly into allocating their pensions should be made to experience the feeling of "tears behind bars".
3. Organizing and leading pyramid selling activities
Nowadays, Ponzi schemes have become more sophisticated, and instead of using “three-level distribution”, they are using “community consensus”. However, the essence remains the same. As long as these three characteristics are met, it is a pyramid scheme in a different guise:
Entry fee: You must first buy coins/stake to qualify
Recruiting people: Developing downlines can unlock higher returns
Team compensation: income is directly linked to the performance of downline employees
This lawyer has seen the system table of a certain "RWA ecosystem" and called it an insider: static income is at least 1% per day, dynamic income is 30% for direct referrals, and 10% for indirect referrals. This compound interest model is even more Ponzi than a Ponzi scheme. What's more, they also have a ranking competition for "city nodes" and "super nodes", which has brought the three-level and above pyramid scheme system to a new height in the blockchain.
According to judicial interpretation, if there are more than 30 people involved in pyramid schemes in an organization and the level is above three, a case must be filed for prosecution. Those team leaders who post "good news" every day in WeChat groups are probably familiar with the "pyramid scheme prevention manual".
Finally, I want to shout again: A-Zu, stop it! Don’t think that no one will check you if you hide behind the video account. The police will check your on-chain data, fund flow, and publicity records in minutes. Do you really think (criminal law) is a decoration? The prison food is not as good as the "annualized 50%" you boast!
Conclusion
Grandpas and aunts, protect your pension
At this point, I really want to say something for the elderly: Stop embracing "RWA"! The "RWA tokens" of these Ponzi schemes are not even remotely related to real RWA. Real RWA is a compliant financial product, and currently only available overseas. Ordinary retail investors in China cannot buy it. The "RWA" you see on video accounts and offline lectures is just a virtual coin. The money invested is most likely to go down the drain.
Grandpas and aunties, investment is not gambling, and blockchain is not magic. If you want to manage your finances, go to the bank and buy some government bonds and funds, which are safe and secure. Don't believe those nonsense about "annualized 50%" and "doubling in half a year". There is no such thing as a free lunch, only traps. Protect your pension and don't let the "Web3 evangelists" cheat you out of your money.
Project owners, please learn from your mistakes.
Finally, this lawyer wants to say to those project owners who are using the RWA concept to engage in Ponzi schemes: You've learned your lesson! Don't think you can do whatever you want by wearing the "RWA" vest. The eyes of the law are sharp. Every record of your video account, WeChat group, and offline lectures is evidence; every token you issue has a clear address on the chain. If the police don't look for you, it's not the time yet. When the day comes to arrest you, it will be too late to cry.
Finally, we once again remind investors, especially middle-aged and elderly friends, to be vigilant against Ponzi scheme fraud under the concept of RWA. Before investing, be sure to understand the authenticity and legality of the project and avoid blindly following the trend. At the same time, we also call on regulatory authorities to strengthen the crackdown on such fraudulent activities to maintain the stability of the financial market and the legitimate rights and interests of investors.
/ END.
Authors: Shao Jiayi, Liu Honglin