Southeast Asia: The Emerging Paradise for Web3 Projects Going Abroad? Extradition Agreements Reveal the Truth

01 Current Status of the Web3 Industry in Southeast Asia

Let's first discuss the current industry status of several popular overseas destinations for domestic Web3 entrepreneurs.

The primary destination is Southeast Asian countries, such as Thailand, Singapore, Vietnam, etc. From May 4 to May 5, 2024, the world's first Web3 music festival will be held in Bangkok, Thailand. Fansland, in collaboration with Fantopia, IME, Neo, Neuroblocks, Hape, BAC Games, LingoAI, NOTHING RESEARCH, Transi, Titan Network, Trip.com, Trekki NFT, OneKey, HPOS10I, IOST, NFTGo, Gonesis, and the special NFT support partner BNB Chain, will participate in this celebration. With the opening of the music festival, domestic Web3 entrepreneurs will feel even more deeply how appealing the Web3 ecosystem in Southeast Asian countries is.

The primary reason for the attractiveness of the Web3 ecosystem is undoubtedly the policies. We have mentioned why domestic entrepreneurs choose to go overseas: because the domestic environment cannot provide the necessary policy support and may even face regulatory scrutiny or potential criminal charges.

Secondly, there is the geographical location. Being Asian countries, they are very close to our motherland, with short travel times and almost no time difference, allowing for synchronization with domestic activities.

Thirdly, the social environment is favorable. There are many Chinese people in Southeast Asian countries, and the attitude towards Chinese individuals is generally friendly. Dietary habits can also be quickly adapted to.

The fourth factor is market conditions. When going overseas, one must consider the implementation of products in foreign markets. Southeast Asia has a large population, and income levels are lower compared to China and other developed countries, which is more conducive to the growth and development of projects in their early stages. Moreover, the penetration of mobile devices and the internet in Southeast Asian countries is relatively high, and the population is younger, making it easier to accept and learn about Web3.

There are many other reasons for choosing Southeast Asia, such as the current state of Web3 capital in these countries. We have already discussed many advantages. It is precisely because of these advantages that more and more domestic Web3 entrepreneurs are attracted to go overseas to Southeast Asia.

However, the purpose of this article is to make you clearly understand that things do not only have a beautiful side but also a negative side. Therefore, the following content is the main text.

02 Can Doing Web3 Projects in Southeast Asia Avoid Domestic Legal Supervision?

Unfortunately, the answer is no. This is because our country adopts personal and territorial jurisdiction for criminal offenses. Article 7, Paragraph 1 of the Criminal Law of the People's Republic of China states: "Citizens of the People's Republic of China who commit crimes specified in this law outside the territory of the People's Republic of China shall be subject to this law; however, if the maximum penalty specified in this law is less than three years of fixed-term imprisonment, they may not be prosecuted." According to the above provisions, Chinese citizens committing crimes outside our territory, regardless of whether such acts are considered crimes under local laws, the severity of the offense, or the nature of the crime, and regardless of whose interests are infringed, are generally subject to Chinese criminal law. Only if the maximum penalty for the crime committed by the Chinese citizen is less than three years of fixed-term imprisonment can they potentially avoid prosecution. The term "may not be prosecuted" does not mean absolute immunity from prosecution but rather retains the possibility of prosecution. Furthermore, Southeast Asian countries were among the first to establish extradition agreements with our country, such as Thailand, Laos, Cambodia, the Philippines, and Vietnam.

03 What Does "Extradition" Mean, and Under What Circumstances Can One Be Extradited?

Extradition refers to the process by which one country hands over a person accused of a crime or already sentenced by another country to that country for trial or punishment, based on the request of the requesting country. The extradition system is an important mechanism for international judicial assistance and a crucial guarantee for a country to effectively exercise jurisdiction and sanction crimes. Jurisdiction based on the "principle of nationality" or "personal principle" means that a country has the right to exercise jurisdiction over all individuals who hold its nationality, regardless of whether they reside domestically or abroad. This means that if a criminal is a citizen of the country, the state can exercise jurisdiction. In other words, even if they have physically gone overseas, they are still subject to their nationality. Once a situation arises where they are accused of a crime by our country, our public security authorities can, according to the relevant provisions of the Extradition Law of the People's Republic of China, submit an extradition request to foreign countries through the Ministry of Foreign Affairs. Currently, our country has extensively utilized extradition treaties for the extradition of suspects involved in telecom fraud occurring in Vietnam.

04 Besides Issues with Web3 Projects, There May Also Be "Illegal Crossing of National (Border) Borders"

When project teams go overseas, they often bring their entire technical team and even family members from China. In handling visa issues, they often opt for tourist visas for convenience and speed. According to the "Interpretation of Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Obstruction of National (Border) Management" by the Supreme People's Court and the Supreme People's Procuratorate:

Article 6 states that the following circumstances should be recognized as "illegal crossing of national (border) borders" as stipulated in Chapter 6, Section 3 of the Criminal Law:

Entering or exiting the national (border) borders without valid entry and exit documents or evading border inspection;
Using forged, altered, or invalid entry and exit documents to enter or exit the national (border) borders;
Using another person's entry and exit documents to enter or exit the national (border) borders;
Using entry and exit documents obtained through false entry and exit reasons, concealing true identities, or impersonating others to deceive entry and exit documents to enter or exit the national (border) borders;
Illegally entering or exiting the national (border) borders by other means.

It may seem that Southeast Asian countries are a utopia for Web3, but due to our country's regulatory scrutiny on Web3 entrepreneurship and the issues inherent to the projects themselves, these overseas projects may violate our regulatory provisions. Coupled with the "personal principle" and the fact that most Southeast Asian countries have extradition agreements, going overseas to Southeast Asia is not as optimal as it appears. It does not exempt one from domestic regulatory and criminal legal risks. Therefore, whether going overseas to Southeast Asia is a reliable option is a significant question mark.

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