Metaverse Legal Compliance Report (5) Gamefi Risk Review

With the rise of the Metaverse concept, Gamefi (chain game), which combines games with Defi and provides a window into the Metaverse world, has become a recent trend. Due to the existence of Defi financial attributes, Gamefi does not have the soil to be born in my country, but it is not uncommon for Chinese residents to participate in or initiate Gamefi overseas, and use this to obtain virtual currency, NFT and other assets with property value in the Metaverse world. Virtual item.

To this end, Sister Sa’s team will analyze the legal risks associated with common Gamefi gameplay in accordance with Chinese laws and regulations for readers’ reference.

How to Get Gamefi Earnings

1. Usual gameplay

In chain games, merchants usually set up a certain virtual currency as the player’s participation threshold. Players can earn game revenue while winning according to the game mechanism. The revenue is usually in the form of virtual currency or NFT issued by the merchant. Players can withdraw virtual currency or NFT to public chain wallets and sell them on exchanges.

2. Hire specialists

Just as there are “golden teams” in traditional online games, Gamefi, which can earn property interests, has attracted many game guilds to set up “golden teams”, hire special personnel to become Gamefi players, and earn numbers for the organizers of the guild assets.

3. Set up automatic execution scripts

Due to the weak gameplay, Gamefi’s automatic execution scripts are more common. Some users will choose to buy a large number of computer equipment and install automatic execution scripts, so as to obtain Gamefi game rewards in a stable and large amount.

Legal Risks for Gamefi Merchants

Because Gamefi is originally an application in financial scenarios, it is necessary to issue virtual currency or NFTs that can circulate freely, plus enticing propaganda such as “playing games to make money”. Sister Sa’s team believes that there is a serious risk of illegal fundraising for Chinese to become Gamefi merchants . Comply with the laws and regulations of the country where the business is located, except for those who have obtained a legal business license.

In addition, in order to avoid the jurisdiction of China’s criminal law, in addition to meeting the requirements of the country where the business is located, a Chinese person who becomes a Gamefi merchant should also block the use of Chinese users to avoid being restricted by criminal law due to the principle of protection and jurisdiction.

Criminal Law Risks of Playing Gamefi

There is no obvious inappropriate behavior by Gamefi’s individual players to earn digital assets for themselves. However, after earning the virtual currency and NFT issued by Gamefi, the behavior of individual players to exchange fiat currency on the exchange has the possibility of helping criminals who are accused of money laundering, disguising and concealing the proceeds of crime , etc. This is also a currency circle friend. The reason why accounts are often frozen.

According to the micro-knowledge, there is no obvious difference between hiring players to earn digital assets and the practice of traditional game guild organizations, and there is no further criminal law risk other than individual players earning digital assets.

As for the criminal law risk of setting up automatic script execution, we believe that it depends on the operating mechanism of the game plug-in: whether there is a possibility of infringing on the security of other people’s computer information systems.

It should be noted that if the development of plug-ins causes harm to the security of other people’s computer information systems, it is easy to be suspected of the crime of providing intrusion, illegal control of computer information system programs, tools and the 280th paragraph of the Criminal Law. Six crimes of destroying computer information systems.Requiring others to develop such plug-ins will constitute an instigator of the aforementioned crime and shall bear corresponding criminal responsibility.

Characterization of proceeds from the sale of Gamefi to domestic residents

Many behaviors carried out by individuals have little risk, but their legal characterizations will change when they become business behaviors. According to Sister Sa’s team, due to the existence of Gamefi’s automatic script execution, employment and other mechanisms, some speculators will choose to buy a large number of computer equipment and equip them with automatic script execution or full-time players, and package the digital asset income generated by such equipment. are sold to the people of our country.

This business model is similar to traditional virtual currency mining, both of which belong to the process of using a specific virtual currency generation mechanism to consume power resources to obtain virtual currency rewards. Therefore, from the perspective of administrative law, if the behavior occurs within the territory of China, the regulatory authorities mayimpose administrative penalties on such behavior in accordance with the provisions of the “Notice on Rectifying Virtual Currency “Mining” Activities .

Expected earnings from the sale of Gamefi computer equipment

Can it constitute illegal fundraising?

Selling computer equipment that can automatically execute Gamefi games on the grounds that Gamefi digital asset rewards can be obtained, there is a risk of being identified as illegal fundraising in practice .

Among the four characteristics of the constituent elements of the crime of illegally absorbing public deposits, “Illegally absorbing public deposits or absorbing public deposits in disguised form”, due to the existence of publicly publicized projects and the contents of the project’s benefits, the elements of publicity, sociality and enticing are not included. No facts hinder.

As for the understanding of illegality, we believe that the illegality of fundraising is reflected in the fact that the behavior violates the regulations of the current effective financial management legal system in China, and there are no legal regulations restricting the implementation of Gamefi computer equipment sales in China’s financial management legal system. Therefore, In principle, such actions do not constitute illegal fundraising, but practical risk exposures still exist.

It should be noted that although Article 2 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal Fund Raising proposes a number of situations that constitute illegal fundraising in the form and means of physical sales, the first interpretation is that physical sales are illegal. The circumstance of fundraising needs to be clearly stipulated in judicial interpretations. Second, even if the behavior is adjusted by the bottom line, it is also required that such behavior does not have the real content of commodity sales or does not have commodity sales as the main purpose.

In mining or Gamefi-like mining scenarios, the purpose of users purchasing corresponding machines or services is still the computer equipment and its application program itself, which has the real content of commodity sales, and should not be explained further.

write at the end

Stage chain tour of the game is not enough and there is financial more than in the country with more serious legal risks involved friends to be careful. The prosperity of chain games is inseparable from the development of the concept of the Metaverse. Although the economic system is an indispensable part of the Metaverse world, the Metaverse should not be a tool for hyping virtual goods. We look forward to bringing novelty and convenience to people’s lives. .

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/metaverse-legal-compliance-report-5-gamefi-risk-review/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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