Imagine creating a product that sells data, such as a mapping or telecommunications service. These are capital-intensive businesses with immense startup costs. Barriers to entry may seem insurmountable – after all, if you wanted to compete with Verizon or AT&T, the cost and availability of cell phone towers alone would be cost-prohibitive. Same with competing…
Tag: nfts
Are Cryptocurrency Games of Skill Legal in the United States?
Real-money games of skill are unregulated and thus legal in the majority of the United States. While there are specific best practices for launching your project, games where skill is the predominant or material factor in deciding the winner are generally not considered prohibited gambling. With the rebound of cryptocurrency markets in 2024 and a…
Are NFT Collectible Card Games Legal in the United States?
NFT collectible card games are generally legal within the United States, provided that developers and players comply with several key laws. Specifically, these games implicate securities regulations, anti-gambling laws, and tax issues. NFT collectible card games are a natural Web 3.0 extension of over-the-board card games like Magic: The Gathering and have drawn a lot…
Are Play-to-Earn Video Games Legal in the United States?
Are play-to-earn games legal? The answer depends on the specifics of the game. For many gaming developers, play-to-earn is a lucrative business model in 2023 and beyond. These games let players compete against other players (PvP) or against the the game itself (PvE) to earn rewards that have real-world value. For example, players may pay…
What Are the Rules for Promoting Crypto or NFTs on Social Media?
If you are a crypto token or NFT promoter, you may inadvertently be advertising securities. If you are, you have obligations under the federal securities laws, and even if you are not, there are “best practices” to protect yourself. At a minimum, if you are promoting a security, you must disclose the paid promotion and…
Do Play-To-Earn Games Sell Unregistered Securities?
Play-to-earn game developers that sell in-game currency tokens or NFTs to their players may be inadvertently selling unregistered securities. Offering unregistered securities is illegal and the Securities and Exchange Commission (“SEC”) may prosecute developers and obtain injunctions, civil penalties, and orders to refund all investor funds (disgorgement). Further, the investors themselves can sue developers (including…
Does Your NFT or Play-to-Earn Project Need Terms of Service?
Yes. In fact, well-drafted Terms of Service are critical to a successful blockchain business. Terms of Service (also known as terms and conditions, T+C, or TOS) are essentially a contract between you and your users that set out the terms on which they are allowed to use your product, interact with your game, buy your…
NFTs: Investing in Virtual Real Estate and Other Digital Assets.
Disclaimer: This article is not investment advice, tax advice, or legal advice. It is for informational and promotional purposes only. Do not take any action (including investments) until you have consulted with a professional about your specific situation. I have previously written about investing in cryptocurrencies through a self-directed retirement portfolio and about using them…
Do I need a Metaverse Trademark?
Luxury goods company Gucci recently bought a plot of LAND in the Sandbox Game, an Ethereum-based play-to-earn game. This LAND is a virtual real estate plot (in the form of an NFT or non-fungible token) where Gucci plans to sell in-game clothing and collectibles. As futuristic as this seems, Gucci is not the only major…
Ask the Crypto Tax Lawyer: Are Play-to-Earn Games Taxable?
Disclaimer: This article is not investment advice, tax advice, or legal advice. It is for informational and promotional purposes only. Do not take any action (including investments) until you have consulted with a professional about your specific situation. At the end of 2021, Ubisoft announced its plans to add NFTs (Non-fungible Tokens) into Ghost Recon:…
What Every Business Owner Must Know About Cryptocurrency Systemic Risk
Whether your business is a full-scale investor in cryptocurrency and blockchain technology or whether you are simply using cryptocurrency to diversify your balance sheet or facilitate international transactions, you are assuming systemic risk. Systemic risk is basically the risk that the “system” in question will fail. The 2008 financial crisis is a recent example of…
Ask the Crypto Tax Lawyer: What Are the Tax Implications of Cryptocurrency and NFT Investing?
Important: The information in this article applies to individual investors and LLCs that are taxed as pass-through entities. The rules are different for corporations and LLCs electing to be taxed as a corporation and are not addressed here. This article is for informational and promotional purposes only and, as always, you should consult with a…