Fossilized Funds: The Dino-Debacle of Iceberg and Dial’s Silver Screen Dream

Steven Iceberg, a fresh-faced alumnus of the Beijing Film Academy, had his director’s cap squarely on his head and dreams of the silver screen in his eyes. His pal Ronald Dial, a scribe whose ebooks about dinosaurs had more fans than a T-Rex has teeth, was the Shakespeare to Steven’s Spielberg. And Steven? He was a bona fide Ronald-o-saurus fan.

Ronald, in a stroke of camaraderie and perhaps a dash of financial optimism, offered his literary gold to Steven for a cool 30% cut of the cinematic treasure. With a flourish and a handshake, they inked a partnership, ready to conquer Hollywood or, at the very least, its Chinese cousin.

All was peachy, except for one tiny snag: their piggy banks were on a diet. Their roll call for funds among classmates yielded more sympathetic shrugs than checks, leaving them a mere RMB500,000 short. Pocket change, really.

But fret not, for Steven had a lightbulb moment that would make Thomas Edison blink: crowdf-unding! They stumbled upon “Cornucopia,” an app that promised a return as bountiful as its name—a 50-fold bounty in just one year. It was the financial equivalent of a fairy tale.

Like moths to a flame, investors swarmed, and voilà, the budget was no longer a figment of their imagination.

Fast forward a year: their cinematic baby made its debut. But alas, the audience was less “ooh” and more “boo.” Rumors spread like wildfire that real dinosaurs were cast—and not treated like the stars they were. The box office was as dry as the Gobi Desert, and angry investors were seeing red, not gold.

As the police came a-knocking, Steven and Ronald faced the music: Jurassic-sized expectations had hatched chicken-sized returns.

What’s a dynamic duo in dino-sized trouble to do? It seems it’s time for our intrepid filmmaker and his literary wingman to craft a sequel: “The Great Budget Caper: How to Soothe the Savage Investor.” Spoiler alert: it may involve less crowdfunding and more crow-eating.

 

Law In A Minute

Steven and Ronald must promptly refund the investors’ contributions or they risk facing legal prosecution. The intricacies of crowdfunding can sometimes tread into the realm of public fund absorption, an action that might contravene China’s financial regulations.

Under China’s Criminal Law, an individual could be criminally charged if they meet the following four criteria: i) collecting funds without authorization from the appropriate authorities; ii) using media, promotional materials, leaflets, mobile messages, or other methods to solicit from the general public; iii) promising to return the principal with interest or rewards within a specified timeframe through monetary, material, or equity compensation; and iv) sourcing funds from the general populace.

Regrettably, Steven and Ronald’s situation ticks all these boxes: i) they failed to secure governmental approval; ii) they utilized “Cornucopia,” essentially a social media platform, to gather funds; iii) they dangled the carrot of a 50-fold return within a year; iv) they cast their net wide, targeting an unspecified demographic. Their crowdfunding venture inadvertently aligns with all four elements of the offense, meaning they must act swiftly to sidestep a potential stint in the slammer.

 

Legal Basis

Criminal Law

Article 176

Illegal absorption of public deposits or disguised absorption of public deposits that disrupts financial order shall be sentenced to imprisonment of not more than three years or criminal detention, and shall also be fined, or only fined; if the amount involved is huge or there are other serious circumstances, the offender shall be sentenced to imprisonment of not less than three years but not more than ten years, and shall also be fined; if the amount involved is extremely huge or there are other particularly serious circumstances, the offender shall be sentenced to imprisonment of not less than ten years and shall also be fined.

If a unit commits the crime mentioned in the preceding paragraph, a fine shall be imposed on the unit, and the persons in charge and other persons directly responsible shall be punished in accordance with the provisions of the preceding paragraph.

If the person who has committed the acts described in the preceding two paragraphs actively returns the illicit gains or makes restitution before prosecution, thereby reducing the harmful consequences, the punishment may be mitigated or reduced.