Play Axie Infinity, DeFi Kingdoms, and other cryptocurrency games while you can because lawmakers will start cracking down by the middle of 2023.
Are you innocent of fun cryptocurrency games? Or are they Ponzi scams that American officials are about to crack down on?
As of mid-August, give or take a few billion, the cumulative value of “GameFi” tokens, which are used in cryptocurrency games of GameFi, was close to $10 billion. (The figure may change depending on whether you want to count partially completed projects, how many tokens are actually in circulation for each project, etc.) In that sense, the legality of the games is a $10 billion issue that few investors have thought about. And that’s a mistake they might come to regret.
GameFi Developers To Face Huge Fines?
That’s because American legislators seem to have a growing bipartisan consensus that the sector ought to be shut down. At least two bipartisan ideas floating among senators would effectively evict these gaming enterprises like GameFi from American land, though they haven’t expressly addressed the issue.
Senators Cynthia Lummis (Republican from Wyoming) and Kirsten Gillibrand (Democrat from New York) introduced the Responsible Financial Innovation Act in June, which, in Lummis’ words, would classify a “majority” of cryptocurrencies as securities subject to regulation by the Securities and Exchange Commission (SEC). Additionally, this month, Senators Debbie Stabenow, a Democrat from Michigan, and John Boozman, a Republican from Arkansas, proposed the Digital Commodities Consumer Protection Act. Similar results would result from designating Ethereum as a commodity, putting it under the control of the less intrusive Commodities Futures Trading Commission (CFTC).
Any token in which investors make investments with “an expectation of profit,” as per the SEC definition that Congress seeks to confirm, is likely to be a security. Let’s discuss what it would imply for your preferred tokens.