How do we define NFTs? Are they securities? Do they have investment value? How do gaming companies navigate the tricky landscape of regulation in games? David B. Hoppe, a top games lawyer from Gamma Law, talks about overcoming regulatory challenges.
The latest craze
At our online conference Pocket Gamer Connects Digital #6, Hoppe discussed the difference between NFTs and fungible items. What do “fungible” and “non-fungible” mean really? How do these dictate government regulations when it comes to games?
In particular, Hoppe reveals how the token craze began and presents market statistics that show the growth of the phenomenon over time. Video game companies of all sizes can engage in this space, and this appeal is behind the growing popularity of the sector. Hoppe also discusses the high-risk, high-reward nature of NFTs, as well as how companies must evaluate these benefits against regulatory challenges.
Gamma Law is a law firm in San Francisco, providing support to clients in cutting-edge media and tech sectors. It specialises in games, esports, VR/AR/XR, digital media, and blockchain. David B. Hoppe is its founder and managing partner. Over a career spanning nearly three decades, Hoppe has advised clients big and small on matters ranging from investment to licensing agreements, film option agreements, and crypto regulatory compliance. He is a regular speaker at our conferences.
On regulating NFTs
The regulatory landscape of NFTs can be tricky in that it’s a new sector still currently being explored. Even NFTs by definition are still a blur – for instance, is your NFT a security? Do SCC regulations apply?
NFTs are not fungible like stocks, but they are now also sometimes considered securities as there are active markets where they are bought and sold. There’s hype about tokens as an investment but at the same time, do NFTs have utility? Do they have value apart from the moneymaking potential?
Towards the end of the talk, Hoppe shares insights on how to present your NFTs so as to handle anti-gambling regulations. He mentions that it’s important to have lawyers review game mechanics where NFTs are involved. He also stresses that the blockchain does not provide complete protection against cyber attacks.
This half-hour session is ideal for anyone who’s always been curious about regulatory practices. It’s also a great watch for anyone who’s eager to know whether or not they will have to pay taxes on NFT purchases and sales.
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