Leading video game retailer GameStop has decided to close down its NFT wallet, citing ambiguities in crypto regulations as the primary reason.
A notification on its NFT marketplace informed users of the impending halt in support for the wallet, effective from November 1.
The alert stated, “Due to the regulatory uncertainty of the crypto space, GameStop has chosen to discontinue its iOS and Chrome Extension wallets from November 1, 2023.”
GameStop urged its customers to ensure they have their Secret Passphrase secured by October. They emphasized, “Customers who have access to their Secret Passphrase can retrieve their account using any compatible wallet.”
GameStop’s recent decision signals a significant shift from their initial intent to embrace crypto games and establish their own NFT marketplace.
This strategic change follows closely on the heels of the company’s termination of CEO Matt Furlong. Furlong held the reins during the wallet and marketplace’s inception. Notably, he had already indicated GameStop’s cautious stance toward NFTs and crypto. In a December 2022 earnings call, Furlong emphasized the company’s reluctance to stake substantial shareholder funds in the volatile crypto sector.
The closure of GameStop’s NFT wallet further reinforces the company’s changing attitude and declining interest in the realm of digital assets.
GameStop has grappled with a series of challenges in recent times, including multiple workforce reductions. The overarching trend in the video game industry towards online delivery has posed a threat to their conventional retail model.
However, despite these changes and challenges, GameStop retains its industry presence. With a sprawling network of over 4,400 brick-and-mortar stores globally, the company continues to be a major force in the video game sector.
Crypto Players in the US Face Uncertain Regulatory Environment
GameStop’s reference to “regulatory uncertainty” aligns with a common rationale seen when companies scale back or halt their digital asset ventures.
This move by GameStop mirrors the broader shifts in the crypto world, especially with the heightened oversight from the U.S. Securities and Exchange Commission (SEC) spearheaded by Chairman Gary Gensler.
Earlier in June, the SEC took legal action against both Binance, the foremost cryptocurrency exchange globally, and Coinbase, the top cryptocurrency platform in the US.
In addition to their actions against prominent exchanges like Binance and Coinbase, the SEC has also targeted other key players in the crypto industry, including Kraken, Bittrex, and the crypto lending entity, Nexo, within this year.
Recently, Gensler expressed his apprehensions about the rife potential for misconduct within the crypto sphere, noting the unsettling presence of numerous malpractices.
Gensler pointed out that despite many cryptocurrencies falling under the jurisdiction of securities laws, crypto enthusiasts shouldn’t operate under the assumption that they’re availing the standard protections of these statutes. He remarked, “US investors aren’t receiving transparent and honest disclosures. The activities of these intermediary platforms are ones we wouldn’t typically associate with or expect from established exchanges like the New York Stock Exchange or Nasdaq.”
