Cryptocurrency and gaming are two industries that found a nexus from the start. The latter has been in regulatory crosshairs for decades, while cryptocurrency is still mostly unregulated. The use of crypto for gambling presents unique challenges for regulatory bodies. BC.GAME is a crypto gambling platform that seeks to provide the best gaming experience in a compliant manner.
In many ways, a cryptocurrency is an excellent tool for gambling. It is outside the financial mainstream and bodes well in societies where gambling is viewed negatively. Therefore, as soon as Bitcoin got some traction, its use for gaming became popular. Since then, dozens of notable crypto-gambling platforms have sprung up online for users to enjoy their favorite slot games or other live dealer casino games without using traditional banking or debit cards.
Negative headlines for the crypto sector could fuel regulations
From a reputation perspective, the crypto industry could have had a better year in 2022. First, there was a market rout as most altcoins lost over half their values in the second and third quarters of 2022. Bitcoin has stabilized somewhat but is still only a third of its peak value in November 2021.
Compound that with the historic collapses of Terra Luna and FTX Exchange, and there is cause for concern for crypto enthusiasts. FTX’s collapse in November 2022 was catastrophic and highlighted outright fraudulent conduct within the industry. Crypto detractors had a field day the more the scandal unfolded.
This sector has long operated with little regulatory oversight but could soon get some prying eyes, especially for exchanges and other platforms of repute that offer services like gaming using crypto. The events of the past twelve months are likely to embolden champions of regulation not only for cryptocurrencies but also for crypto gambling.
Existing regulations are not targeted
Most existing regulations are general and deal with aspects like Anti-Money Laundering (AML) and basic customer information (KYC). Ironically, FTX presented itself as a compliant exchange and even spent considerably on political lobbying.
Multiple developments are likely to come in the year that has just started. Crypto has proven too big for a “wait and see’ attitude. Crypto gambling companies should expect stricter licensing requirements before being granted significant approvals to start operations.
Currently, most countries don’t have specific laws targeting crypto gambling, and general gaming regulations or financial sector regulations apply.
In the UK, regulators will need to go beyond the provisions of the Gambling Act. This legislation was ideal for physical casinos and had some gaps for online crypto gambling. BC.GAME obtained the UK Gambling Commission Licence, a requirement for gaming in the UK. At present, these regulations mostly require AML and KYC compliance.
Malta has proven to be an attractive destination for crypto gaming operators. It has a suitable regulatory environment and is within the European market. BC.GAME obtained the Malta Gaming Commission License to anchor regional operations.
FINCEN could give more guidance on operating under regulations provided in the Bank Secrecy Act for American crypto gambling companies. These regulations can apply to transmitters of value in convertible virtual currencies. States have specific online gaming regulations that crypto gambling operators must be aware of.
Japan passed regulations in 2019 controlling exchanges and custodians of crypto services. The country has strict gambling regulations, and operators in that jurisdiction must adhere to them even in online gaming. Singapore is a more crypto-friendly jurisdiction and has become a crucial Asian hub. However, China totally bans cryptocurrencies, and online crypto gambling in China is challenging.
Regulations likely for 2023
The most significant regulatory development this year could be the Market in Crypto Assets (MiCA) bill before the European parliament. This legislation could have a global impact, like the GDPR for data use regulation. MiCA intends to provide a broad regulatory framework, touching on aspects like AML, corporate governance, and consumer protection.
Notably, the bill also aims to regulate stablecoins, of which Terra Luna was a cautionary tale. It could be the breakthrough regulation that provides the basic framework for most countries that ignored crypto for years to create something similar.
FTX was an American exchange and sent shockwaves in that jurisdiction upon collapse. The US House of Representatives even held hearings inviting the likes of entrepreneur Kevin O’Leary to testify. The self-regulatory corporation Financial Industry Regulatory Authority (FINRA), which is keen on financial sector regulation, researched the collapse and will provide proposals this year on possible regulations. Treasury secretary Janet Yellen has proposed for money service crypto platforms to segregate customer funds from company assets to prevent a doomsday collapse like that of FTX. The US has significant soft power globally, and any developments in this jurisdiction have a global impact.
It is unlikely that countries with crypto as a legal asset will move to place total bans like in China. The regulations that will emanate this year will likely aim at ensuring accountability for crypto institutions and sanity within the industry.
Follow all developments on BC.GAME
Positive regulations in the crypto sector will be for the greater good. For far too long, few actors have brought disrepute to an entire industry. Crypto gambling can emerge better from this bear market and increased regulatory scrutiny.
BC.GAME is your home for all the latest regulatory updates. As a premier crypto gambling casino, information is a valuable asset for gaming fans on this platform. There could be historic regulatory developments on the regulatory front, and you deserve the most concise information once they happen.
