The use of blockchain technology for crypto games, such as CryptoKitties, and other token-based digital collectibles is on the rise. Also growing is the number of tokenized-assets marketplaces such as Rarebits and cryptocurrency designed specifically for gaming, such as Enjin Coin. These innovative platforms are leveraging the power of blockchain technology as applied to games and other interactive entertainment.
As is always the case with cutting edge technology and business models, a number of potential legal issues may be lurking of which many companies may not be aware. In the crypto world, most of the regulatory focus is on initial coin offerings (ICOs), as over $6.6 billion in token generating events already have occurred in 2018. However, many of the potential regulatory issues with ICOs and other legal issues could apply to blockchain-based crypto games and collectibles. Little attention has been paid to these issues.
For example, in some circumstances, crypto game tokens could be securities and token marketplaces could be securities exchanges. Additionally, if not structured properly, these offerings could constitute gambling and/or require money transmitter licenses.
For a more detailed explanation of these issues, please see our paper on “Legal Issues With Blockchain-Based Crypto Games and Collectibles.”