With cryptocurrencies gaining vast popularity in the world of gaming, it’s really no surprise that everyone around the world is turning their eyes on it. Being relatively new though, the regulations of these virtual currencies are also pretty new. Regulations with regard to the transaction of cryptocurrencies were set in place to prevent cases of fraud and money laundering. Here are some of the important policies that any developer who is interested to buy osrs items with cryptocurrency should take note of.
The first set of regulations to address that concern were implemented by the Financial Crimes Enforcement Network or the FinCEN.
Virtual Currency with Respect to Money Transmission
The FinCEN has very strict laws with money transmission. To counter money laundering cases, they require all institutions that transfer money (such as banks, casinos, foreign exchange, etc.) be registered with FinCEN under a BSA/AML program. This program requires them to have an auditor who will report all the activities of these money transmission industries to investigate for any possible laundering or fraud cases.
With regard to virtual currency, FinCEN also applies some money transmission rules as well. Basically, any entity that is involved in the transfer of virtual currency (including Bitcoin and other cryptocurrencies) in exchange for other currencies is considered a money transmitter. Bitcoin and other cryptocurrencies are regarded as CVCs – meaning currencies that have an exchange rate with fiat currencies.
Regulations with Game Currencies
With talks about cryptocurrencies entering the gaming world as in-game currencies, definitions as to what a CVC is will be a little bit vaguer. You see, every game has its own in-game currency that is used for buying stuff inside the game. It can’t be used as a substitute for real money in a general sense. However, it has to be established that if the in-game currency is allowed by the game management to be exchanged for real money or goods, it may be considered a CVC.
This is why it’s best if game developers would clearly state in their terms and conditions/policies that the virtual currency represents only a non-transferable and non-exclusive currency to be used in the game only. Also, it must be stated that the virtual currency has no value.
Cryptocurrencies in Gaming
Another scenario would be if cryptocurrencies will be used as an in-game currency. This case would make the developer a CVC. However, this may be prevented if the developer:
- Makes a separate in-game currency to the cryptocurrency of the blockchain network it is built in
- Does not facilitate the conversion of in-game currency to cryptocurrency
- Makes clear of that in the policies and terms and conditions
Doing this may help avoid legal claims.
With virtual currencies becoming more popular, it’s normal for regulators to crack down on it to prevent any money related crimes to pop out. Of course, the rules are still pretty new and need amending depending on the situation. With cryptocurrencies slowly entering the world of the blockchain, we can expect more crackdowns in the future. For now, though, these are the important things to take note of.