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…

Are Play-to-Earn Video Games Legal in the United States?

Are play-to-earn video games legal? The answer depends on the specifics of the game. For many gaming developers, play-to-earn is a lucrative business model in 2021. 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 real…