The South Korean Constitutional Court has upheld a law that prevents players from buying and selling crypto and non-fungible tokens (NFTs) – and is trying to punish those who trade in coins and items related to video games.
Two unnamed people had tried to appeal to the court after the prosecution, claiming that the Game Industry Act, which provides that the exchange of virtual currencies acquired in games is punishable by law, is a violation of the country’s Constitution. Had the duo been successful, the case would likely have opened the floodgates for play-to-earn (P2E) games, which are currently blocked by the national gambling regulator.
However, the News1 media company reported that the Constitutional Court had decided to reject the appeal, with the judges of the court having decided “unanimously” against the appeal.
The duo was identified only as A and B for legal reasons. The latter was entrusted with the sale and repurchase of virtual items. A was fined approximately US dollars. B, meanwhile, is a PC gaming space (known locally as PC-Bang) operator tasked with creating an online environment where customers could use crypto to play gambling games like poker and go and help them exchange their winnings for cash.
Although no gaming companies were directly involved in the proceedings, they will have watched with great interest: South Korea’s gaming industry is worth an estimated $ 16 billion. And domestic firms were interested in exploring P2E titles.
Many have even created and published their own offers abroad, but the regulator has resolutely stuck to its decision to refuse age-appropriate licenses for NFT and crypto-related titles. Without such a license, distribution in South Korea is next to impossible – especially since the regulator hinted last year that it will ask app stores to pull NFT and P2E titles from their domestic stores. The Game Industry Act, which came into force in 2006 and has since been amended several times, prohibits companies and individuals from exchanging items or “virtual currency” acquired through the use of games, as well as facilitating the exchange of items / crypto to fiat. Offenders, according to the law, can be imprisoned for up to five years, with fines of up to USD also incurred. Two previous attempts to challenge the constitutional status of the law were dismissed by the Constitutional Court.
The same media company quoted the presiding judges as saying that the law “discourages the use of gaming products that disrupt public order. They added that the law promoted the creation of a “solid gaming culture” in South Korea.