The Metaverse Is Subject to Earth’s Boring Old Rules

April 25, 2022 Korea Blockchain

GameFi adoption has been hitting obstacles worldwide, including China and Korea, because of laws about converting in-game tokens to currency.

Good morning. Here’s what’s happening:
Prices: Bitcoin and other major cryptos were roughly flat from the beginning of the weekend.
Insights: The law can create headwinds for GameFi and NFT adoption.

Technician’s take: BTC has been struggling to sustain positive momentum over the past few days.

A Texas order is similar to the same headwinds that crypto is facing in Asia
“What happens in the Metaverse, does not stay in the Metaverse,” said the Texas Securities Commissioner when it ordered a halt to trading of the ‘Gambling Apes’ NFT collection from Cyprus-based Sand Vegas Casino Club.

Despite the Sand Vegas team saying that it will abide by the law but isn’t subject to U.S. rules, jurisdiction shopping ultimately lost and U.S. rules won. The project has been delisted from U.S.-incorporated OpenSea and now is listed on LooksRare, which operates as a DAO.

We will see how long this lasts. It’s not that the NFT promotes the vice of gambling; rather, the problem is that the promise of profit-sharing likely makes it a security and violates the Howey Test, which determines if a transaction is an investment contract, and has become increasingly relevant in considering digital assets.