Companies and regulators must ensure that NFTs are not a tool used for money laundering. They consider that regulators care about the money spent in the metaverse.
Games with roots in blockchain and non-fungible tokens (NFTs) have been successful throughout 2021. One of the issues that concern the most this industry is regulations. Regulation is a subject that got debated during the sixth edition of the virtual event European Blockchain Convention.
Rudy Koch, the co-founder of Mythical Games and one of the convention panellists, highlighted that many topics have not been under discussion about the regulatory aspect of the NFT and video game industry.
Koch said he was involved in the Mythical Games use case presentation to 50 state regulators in the United States of America and the European Union. He said they are concerned about the money transmission licenses and all the regulations and compliance that revolve around that.
In that sense, Koch stated that regulatory agencies are there to protect consumers, but protecting companies is also essential, something the panellists agreed on.
Koch also explained the situation using properties in video games or metaverses as an example. He said that: If people want to lean on ownership, and if they acquire an item, they can do whatever they want with the said item, mainly because that item is theirs.
That is why people believe that if someone gets scammed, they may blame Web3. Although he also recognized that regulations are evolving and are in constant movement.
Laws in the United States of America Need a Radical Change
Sarutobi Sasuke also joined the discussion. He rules as an executive in one company behind the popular game Axie Infinity. He indicated that the US Securities Law needs reform.
“It’s going to be difficult for them [US]. Stop because there is still this mechanism whereby offshore entities can serve to issue tokens and this kind of separation from their corporate structures to try to circumvent regulations. They only wonder how the regulatory entities would get into what happens in the metaverse.
In Sasuke’s view, regulators are worried that the industry should pay taxes on the revenue they earn in the metaverse. Sasuke highlighted that governments already know that people are spending more and more time in virtual worlds, so they’re going to want to get a piece of that huge pie at some point.
The executive even asked, “How is revenue regulated in the metaverse? Or How do regulations tax in-game items?” He jokingly replied that perhaps regulatory agencies should open an office in Decentraland [Ethereum-based entertainment metaverse] to do that job.
Sasuke’s position comes from the number of companies that have entered to take part in the metaverse and have acquired virtual properties for millions of dollars and do not pay taxes for them. Tokens.com Corp purchased the largest tract of land in Decentraland for at least USD 2.8 million.
By: Jenson Nuñez
