GameStop Folds its NFT Marketplace Due to Crypto Regulatory Uncertainty

Table of Contents

• Retreat from Web3 Initiatives
• Regulatory Environment
• Takeaways

Retreat from Web3 Initiatives

GameStop shut down its NFT marketplace on October 31 citing regulatory uncertainty in the cryptocurrency space. The marketplace had launched in partnership with ImmutableX that same month but failed to gain traction. This follows GameStop’s discontinuation of its crypto wallet in August. While customers can still sell their NFTs on other marketplaces since they are stored on the blockchain, GameStop’s own platform had seen little activity since September 2021.

Regulatory Environment

The closure of GameStop’s NFT platform is part of a broader pullback from Web3 initiatives in 2022. Under SEC Chair Gary Gensler, the SEC has ramped up enforcement actions against crypto exchanges like Binance, Coinbase, Kraken, Bittrex and Nexo over concerns of fraud and lack of investor protections. While the SEC voted favorably for spot Bitcoin ETFs in 3-2 vote, Gensler clarified that the SEC does not endorse Bitcoin and advised investors to be aware of cryptocurrency risks.

Takeaways

The key takeaway is that the complex and uncertain regulatory environment for cryptocurrencies in the U.S. is discouraging some companies from pursuing NFT and crypto initiatives. GameStop’s pullback shows that even large companies are struggling to navigate this landscape and provide solutions that comply with evolving regulations.

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