GameFi developers could face big fines and tough times

Enjoy Axie Infinity, DeFi Kingdoms, and other cryptocurrency games while they last, because lawmakers are on the to crack down by mid-2023. Opinion

Are cryptocurrency games fun? Or are these Ponzi schemes facing an imminent crackdown by regulators in the United States?

Cryptocurrency gaming-related tokens — colloquially known as “GameFi” — were worth a cumulative total of nearly $10 billion as of mid-August, give or take a few billion. (The number can vary depending on whether you want to include partially completed projects, how you count how many tokens the projects technically have in circulation, etc.) In that sense, whether the games are legal is a $10 billion question. which few investors have thought about it. And it's an oversight they may soon regret.

That's because a bipartisan consensus seems to be forming among lawmakers in the United States that the industry needs to be shut down. They didn't address the issue specifically - good luck finding a congressman who said the word "GameFi" - but there are at least two bipartisan proposals circulating among senators that would effectively kick these gaming projects off American soil. .

The Responsible Financial Innovation Act, proposed in June by Senators Cynthia Lummis (Republican of Wyoming) and Kirsten Gillibrand (Democrat of New York), would, in Lummis' words, classify a "majority" of cryptocurrencies as securities regulated by the Securities and Exchange Commission (SEC). And this month, Senators John Boozman (Republican of Arkansas) and Debbie Stabenow (Democrat of Michigan) proposed a second proposal - the Digital Products Consumer Protection Act. The effect would be similar, but with more emphasis on classifying Ethereum as a commodity - placing it under the purview of the lighter Commodities Futures Trading Commission (CFTC).

According to the definition of the SEC, Congress plans to...