NFT platform mergers and acquisitions don’t let “I see the line” become “I see the penalty”

2021 is a hot year for NFT thieves.

How hot is it? Statistics from a foreign corpus show that the usage rate of the term “Non-fungible Token (NFT)” will increase by 110,000% in 2021 (that’s right, it is indeed 4 zeros), surpassing other words such as Metaverse and vaccine. In such a hot environment, in the second half of 2021, leading companies will end up fighting with their own IPs and a lot of money, and the Chinese-style NFT market route has gradually formed. A hot scene. In 2022, it is expected that more capital will enter the NFT market, and there will be integration between platforms. The resulting trend of NFT platform mergers and acquisitions may be about to emerge.

At the same time, we also have to pay attention to the criminal risk in the process of NFT platform mergers and acquisitions . As early as the year when the P2P platform was violent, there was a wave of discussions on the common crime of the P2P platform in the field of legal practice—— After the acquisition of the P2P platform, the platform thunderbolt acquirer does not constitute a joint crime? How to determine the “knowing” of the criminal business of the previous platform? There are many “bloody” lessons behind these big discussions, which is the so-called teacher who never forgets the past. In the process of merger and acquisition of NFT platforms, it is necessary to do a good job of preliminary criminal compliance review , so as to avoid “knowing or should know” that the business is suspected of illegal operation, illegally absorbing public deposits, etc., but still ratify and condone it. Or acquiesce to the above behavior and fall into the prison of “inherited joint crime”. Today, Sister Sa’s team would like to discuss with you the problems of inheritance and accomplices that may arise in the process of NFT platform mergers and acquisitions .

1. Due diligence cannot ignore the risk of criminal review

Judging from the current practice, the due diligence conducted by financial investors in the process of mergers and acquisitions often shows the characteristics of ” emphasizing civil and commercial affairs and ignoring criminal matters “. In detail, financial investors generally hand over due diligence work to non-litigation lawyers specializing in civil and commercial affairs. Such due diligence often has flaws in criminal aspects, and criminal risks are easily ignored.

Taking the thunderstorm P2P industry as an example, financial investors often get involved in the specific businesses of M&A companies, and if these specific businesses have the risk of illegal operation and illegally absorbing public deposits, and financial investors will ratify, condone or otherwise after joining. To acquiesce or even exploit such a risk constitutes an inherited communal crime, by way of act or omission. Today’s NFT platform is developing rapidly, and the industry has been testing the boundaries of business criminal law. Whether the NFT business involves illegal operations, illegal absorption of public deposits, etc. is more worthy of attention in such a large environment. Therefore, an important task of financial investors in the process of due diligence is to check whether the business of the NFT platform has illegal operations in the criminal law, illegal absorption of public deposits, etc. , in order to minimize their own criminal risks and avoid forming Inherited joint crime.

2. Why is there the risk of inheriting joint crime in the process of mergers and acquisitions?

Before answering this question, we must first clarify what is the common crime of inheritance? How does my country’s judicial practice deal with inherited joint crimes?

The so-called inherited joint crime means that after the former perpetrator commits some acts, the later participants participate in the crime based on the contact of will, and complete the crime individually or jointly . The focus of the theory of inherited accomplices is the scope of the criminal responsibility of the later participants, or whether the later participants should be held criminally responsible for the behavior and the consequences of the former perpetrators .

The answer to this question, in theory, generally presents the opposition of affirmative theory, negative theory and various intermediate theories. Of course, the actual theoretical picture is more complicated. The academic community’s handling of inherited joint crimes involves various aspects such as the nature of the inherited behavior and the inherited responsibility. There is also a complex blending phenomenon between various theories. From a practical standpoint only, and simplifying systemic thinking as much as possible, a brief introduction to these three theories is given.

definitely say

The basic position of affirmation is that the later participants should also fully bear the same responsibilities as the former perpetrators. It is certain that although it is based on the theory of causal accomplices, its requirements for causality are relatively relaxed. Scholars who hold the affirmative theory generally believe that as long as the later participants know and use the behavior and the results of the former actor, from the perspective of value judgment, its condemnability is no different from the case of prior conspiracy .

It is not difficult to see that this doctrine would impose excessively severe criminal liability on later participants. In fact, no one of the scholars studying in Japan who first introduced the theory of succession and accomplice into our country has clearly stated that it is affirmative. It is not difficult to draw a similar conclusion from the opinion that when a joint criminal intention is formed in the process of committing a crime, it is also a joint crime. Although it must be repeatedly refuted by criminal law scholars, it still has a great influence in the field of judicial practice .

deny

The basic position of the negation theory is that the late participants should not bear criminal responsibility for the first implementation of the behavior and the result before the common intention. This theory thoroughly implements the causal accomplice theory. If the later participants have no causal connection to the former perpetrator’s criminal behavior, they do not need to take responsibility, and the latter participants only need to be responsible for the crimes they participated in. For the consequences of the crime before the participation of the latter participant, even if the latter participant is aware of it, it does not need to be responsible. Negative theory is worthy of affirmation in thoroughly implementing the theory of causal accomplices: the later participant only bears complicity for the fact that there is a causal relationship with his own behavior, and there is no relationship between the behavior of the later participant and the damage already caused by the predecessor. There may be a causal relationship, because the only thing that the latter participant can control is the fact of the crime after his participation.

The biggest problem facing the negation theory is that the judicial practice is unacceptable . Some scholars have pointed out that the proof of criminal law theory is nothing but an effort to persuade judges. If a certain theory does not help to solve the hot issues of criminal law in the country and cannot play its due function, then this theory is powerless, and it is possible to deny it. facing such questioning.

At present, the hot issue of succession and accomplice in the field of practice is the criminal liability of the telecommunication network fraud payee. If it is negated, the payee without prior conspiracy will never constitute an accomplice in the crime of fraud. , which appears to be at odds with the criminal policy position. 

middle say

The so-called middle theory, the simple expression is that the perpetrator can only bear criminal responsibility for the results that have a causal relationship with his own behavior . , the later participants cannot be held criminally responsible for the actions and results previously caused by the forerunners. However, although the behavior and results of the forerunner cannot be inherited, the state caused by it can be inherited, if this state continues after the latter participant intervenes, and is actively used by the latter participant as his own criminal means, as a means of achieving When the means of one’s own crime or a part of one’s own criminal behavior, the latecomer shall bear criminal responsibility for the results caused by this state.

As far as the acceptance of criminal law functionalism and judicial practice is concerned, the mediation theory is an ideal point of view , but how to deal with the consistency between the mediation theory and the causal accomplice theory becomes a problem. The Japanese criminal law academia has made several useful attempts, among which the deontology theory advocated by Yamaguchi and the mitigation of causality of accomplices proposed by Takashi Hashizoma may be useful for reference.

3. How to deal with inherited accomplices in my country’s practical field?

As mentioned above, there are similarities between the theory of joint crime of conspiracy and the theory of succession of accomplices in the criminal law theory of our country. For a long time in the past, the theory of affirmation has always been a common practice in the field of practice. With the rise of the middle theory, more and more cases of middle theory appear in the field of judicial practice in traditional crimes against persons and property (such as robbery and rape). This is a good trend. However, in the case of business crimes such as illegal business crimes that are prone to occur in the process of mergers and acquisitions of NFT platforms, there must be a considerable number of judgments , which is very noteworthy.

For example, in the illegal business case of Fang and others, the defendants Fang 1 and Fang 2 have illegally manufactured and sold cigarette filter sticks since May 2016. Around January 2018, Fang 2 contacted the defendant Wang and asked them to He went to Jinjiang to help his boss Fang Mou 1 produce cigarette filter rods until the incident in October 2018.

The defender of the defendant Wang Moumou believes that Wang Moumou only joined the team of Fang Mou 1 and Fang Mou 2 in January 2018, and he should not be responsible for the cigarettes produced by the team from May 2016 to the period before Wang Moumou joined. The amount of filter rods shall be held responsible, and it shall be calculated separately from the illegal business amount of Fang Mou 2 and others. The court held that Wang Moumou was an inherited accomplice. Although the amount of crime committed by the inherited accomplice was different from that of the perpetrator who participated in the crime, the specific amount of crime committed is only meaningful for sentencing, and the conviction still needs to be based on the total amount of crime. apportionment calculation .

In a more extreme case, from the end of September 2015 to October 22, 2015, Yao 1 and others opened a den for the production of counterfeit cigarettes. After the incident, regarding the amount of money involved in Yao 2 who only joined on October 21 of the same year, the court held that the defendant Yao 2 was arrested shortly after joining, but the first time his confession was hired for transportation, it was found to be fake. The den of smoke, that is, knowingly participating in the crime, constitutes an inherited joint crime . According to the principle of “partial implementation and full responsibility”, it is necessary to bear responsibility for all the consequences of the crime , but not only for the consequences caused by the implementation of the behavior after it is added.

In addition, some practitioners believe that in the Minutes of the Symposium on Issues Concerning the Handling of Criminal Cases of Environmental Pollution, “the actual controller, main person in charge or authorized person in charge of the unit learns that the individual members of the unit have committed environmental pollution crimes. Those who do not stop or take timely measures, but are ratified, condoned or acquiesced, shall be identified as a unit crime.” The rule applies the principle of complete affirmation of successor accomplices. The proponents of this view believe that after the employees of the enterprise have committed the crime of polluting the environment without the prior knowledge of the person in charge of the enterprise, due to the particularity of such cases, the implementation is still in a state of unfinished execution. At this time, the person in charge of the enterprise After learning, if you do not take measures to stop it, it is equivalent to recognizing and accepting the employee’s previous criminal behavior and its results, and joining in midway, so you should be responsible for all the criminal behavior of the employee before and after the company joins. This is actually a certainty. reflect.

It is undeniable that although the middle theory has become more and more influential in the field of criminal law , the affirmation theory still occupies a large proportion in the handling of business criminals in judicial practice. This requires that in the process of NFT mergers and acquisitions, we must pay attention to the relevant criminal risks, and try to avoid becoming an “inherited accomplice” in common crimes.

4. How should we deal with possible criminal risks?

Sister Sa’s team believes that in the process of mergers and acquisitions involving NFT and other projects, it is necessary to do a good job of criminal risk assessment and criminal compliance review before mergers and acquisitions, so as to avoid “knowing or should know” business suspected of illegal operation and illegal absorption of public deposits Under the circumstances of other acts, the above-mentioned acts are still ratified, condoned or acquiesced, thus constituting an inherited accomplice of inaction.

In the process of criminal risk assessment, issues that may require attention include conducting a comprehensive compliance review of project establishment , reviewing whether there are risky publicity behaviors such as the use of “unilateral rise, welfare rollover”, publicity of “expected returns, forecast investment performance” and so on.

write at the end

At present, my country’s NFT business model is significantly different from foreign NFT platforms. All domestic NFT platforms have introduced systems to prevent illegal activities related to virtual currency in the name of digital collections to a certain extent, making NFT products more prominent. Its artistic value . The efforts of various enterprises to prevent the productization of NFT financial products are worthy of recognition, but at the same time, they should do a good job in relevant compliance work, eliminate criminal risks , and truly eliminate “I see punishment” and leave “I see the line” The digital collection market with Chinese characteristics.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/nft-platform-mergers-and-acquisitions-dont-let-i-see-the-line-become-i-see-the-penalty/
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