In the current era when the Web3 concept remains highly popular, RWA (Tokenization of Real-world Assets) was supposed to be an important direction for promoting financial innovation and achieving efficient asset circulation. However, unexpectedly, it was targeted by lawbreakers and became a tool for money laundering to take advantage of the market. Recently, many people have frequently come across promotional content on Video Account claiming to be “RWA token”, which seems grand and sophisticated but is actually full of hidden traps.
The “five-piece set” of the money pool is full of tricks
These capital pools that ride on the RWA concept have highly recognizable “standard configurations”. In the video, there is often a “lecturer” in formal attire, holding a marker pen and chatting freely in front of a small whiteboard. While calculating the alluring returns, he is drawing complex structure diagrams, as if revealing a surefire wealth code that guarantees profits. On the background wall, banners with red backgrounds and white characters such as “Web3 Wealth Summit” and “RWA Global Ecosystem Conference” are particularly eye-catching, creating a grand and professional atmosphere. The display board was densely pasted with “Project Introduction” and “Global Layout”, and a large amount of English and terms were intimidating. It seemed profound but was actually empty. There were also currency detectors on the spot, with stacks of cash piled up beside them, blatantly hinting to investors that “once you invest, you will make a fortune.” Most of the people sitting in the audience were grandpas and grandmas with eyes full of “hope of getting rich quickly”. This familiar scene was completely a classic trick of the money market.
The “preacher’s” tricks of exploiting people
To attract attention, these accounts have all given themselves intimidating titles such as “Web3 evangelist”, “RWA evangelist”, and “Blockchain wealth mentor”, claiming to be “industry pioneers” and boasting about having “been deeply involved in blockchain for ten years”. But upon a little verification, it will be found that ten years ago, blockchain had not yet emerged, and these claims are full of loopholes.
Their video content is full of brainwashing tricks. First, a bunch of obscure and hard-to-understand terms were thrown out, such as “pledge”, “compound interest”, “smart contract”, and “algorithmic supply and demand balance”, leaving the audience completely confused and leaving only the impression that “you can get rich quickly by investing”. Then it emphasizes that “RWA is the ultimate form of blockchain, and missing it means regretting it for a lifetime”, creating a sense of urgency. Finally, with means such as “time-limited discounts” and “30% commission for recruiting new members”, they urged investors to pay up quickly, which was highly indicative of pyramid schemes. However, a genuine RWA involves asset securitization and strict compliance supervision, and it is by no means something that can be achieved merely through offline promotion.
Why do you specifically target the elderly
It is no accident that at the offline events of these capital pools, most of the audience are elderly people. Today’s young people have a certain understanding of Web3, are familiar with the meme coin gameplay, and know how to judge whether a project is reliable by checking the contract address and other methods. The offline lectures of the money pool, cash deposits, and commissions for recruiting new members are not effective for them.
However, the elderly know very little about the concepts of blockchain and Web3. When they hear high-end terms like “RWA” and “Web3”, they are easily attracted by the claim that “they can make a lot of money”. They lack the ability to distinguish the authenticity of projects, do not know how to review white papers or analyze data on the chain, and are easily swayed by the lecturers’ sweet talk and emotional rhetoric, such as “investing in RWA is accumulating wealth for future generations” or “not investing means being out of step with The Times”, they tend to impulsively take out their pensions.
The three tricks of a capital pool
These capital schemes that ride on the RWA concept can be summed up in three main tricks. First, it’s about creating a buzz, bragging about RWA as “the ultimate trend in blockchain”, confusing investors with professional terms, and then creating a tense atmosphere that “now is the last chance to get on board”. Secondly, there is the practice of making empty promises, calculating attractive returns for investors, such as “50% annualized” and “doubling in half a year”, and presenting false “success stories”. The last step is to push for orders. Through pyramid schemes such as time-limited discounts, commissions for recruiting new members, and team dividends, investors are forced to pay up as soon as possible.
They are also keen on organizing “offline experiences”, renting hotel meeting rooms, placing currency detectors and cash, and arranging for children to boast about investment returns on the spot, misleading the elderly into falling into the trap. These so-called “RWA tokens” have no underlying assets to support them at all and are worlds apart from genuine RWA.
The legal consequences of engaging in a money pool
In China, the issuance and promotion of virtual currencies, especially the operation of money pools, seriously cross the legal red line. From a legal perspective, these acts may involve multiple charges.
The crime of illegally absorbing public deposits is one of the common charges. According to the judicial interpretation of the Supreme People’s Court, if an act simultaneously possesses the four characteristics of illegality (not approved by the financial regulatory authorities in accordance with the law), publicity (publicly publicized to the society through the media and other means), inducement (promising to return the principal and pay interest or give returns), and sociality (absorbing funds from unspecified objects), it constitutes the crime of illegally absorbing public deposits. Those who promote “guaranteed principal and interest”, “static returns”, “dynamic rewards” on Video Account, and even demonstrate the exchange of RMB for US dollars on the spot in the community, have all violated the law.
An individual who illegally absorbs public deposits exceeding 1 million yuan or involving more than 150 people will face fixed-term imprisonment of not less than three years but not more than ten years.
The nature of the crime of fundraising fraud is even more heinous. The core difference between it and the crime of illegally absorbing public deposits lies in whether there is a “purpose of illegal possession”. It can be identified by checking the flow of funds, the authenticity of the project and the background of the team. Those project white papers are perfunctory, the team information is false, and the so-called “empowerment of the real economy” is just a showy money pool. Once the amount of fundraising fraud is particularly huge (over 5 million), the maximum sentence can be life imprisonment.
The crime of organizing and leading pyramid schemes is also a common charge involved in money schemes. As long as there are three characteristics, namely the entry fee (one must first purchase coins or pledge to obtain the qualification), recruiting new members (developing downlines to unlock higher returns), and team-based compensation (returns are directly linked to the performance of downlines), it is considered a pyramid scheme behavior. If the number of participants in a pyramid scheme within an organization exceeds 30 and the hierarchy is at least three levels, it will be subject to investigation and prosecution.
Protect your retirement money well and stay away from the traps of money pools
Grandpas and grandmas must be vigilant and take good care of their pensions. The “RWA tokens” of these capital pools have no connection with genuine RWA. Genuine RWA is a compliant financial product, and currently, it is difficult for ordinary domestic retail investors to participate. Most of the “RWA” in video accounts and offline lectures are just air coins. Investing in them will only result in total loss.
Investment is not gambling, and blockchain is not a magic cure for getting rich quickly. If you want to manage your finances, it is recommended that you choose stable products such as bank Treasury bonds and funds.
Don’t easily believe false promises like “50% annualized” or “doubling in half a year”. There is no such thing as a free lunch; there are only traps. It is hoped that everyone can recognize the true nature of the money pool and not let the “Web3 preachers” defraud the hard-earned retirement money. At the same time, I also advise those lawbreakers who engage in money laundering to stop as soon as possible and not to take chances. What awaits you will eventually be severe legal punishment.
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