Legality of crypto in games question

[CristianOff]

Imagine that you have a game, just like a mobile game (Jetpack Joyride, Subway Surfers, etc.)
We all know that those games allow for in-app purchases. Use money and get their in-game currency to
buy awesome stuff we all need like skins and pixel upgrades (#sarcasm).

Now put the situation where instead of the in-game currency you use an ERC-20 issued by yourself on the
test network (Ropsten, Rinkeby maybe?). For the in-game currency you use your test network ERC-20 and you sell it
for money just like companies sell their in-game currency. Are you committing an illegality?



The reason I am asking is because I have been working with young people (10yo - 18yo) to do my best to push
this industry forward by making it widespread amongst a young audience (the future!). So I have this leucoincards.com (beta Ethereum Rinkeby card game)
where it makes sense to sell our "in-game" currency just like other games do, but we are slightly unsure about it in this moment.

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[sunsilk]

I think this is more of a Service Discussion (Altcoin) topic. And did I read it correctly that you're working with 10 years old - 18 years old? You won't have any problems working with the legal age base on your country's law.

AFAIK, the legal age by most countries is revolving around 16-18 years old and with what you have there, sure there will be an illegality that you're doing with them unless there's a parents consent and other legal consent made by your law.

[CristianOff]

I think this is more of a Service Discussion (Altcoin) topic. And did I read it correctly that you're working with 10 years old - 18 years old? You won't have any problems working with the legal age base on your country's law.

AFAIK, the legal age by most countries is revolving around 16-18 years old and with what you have there, sure there will be an illegality that you're doing with them unless there's a parents consent and other legal consent made by your law.

I think working is not the best word I used. More like brainstorming and understanding in a voluntary way their needs. They are friends of friends and smaller brothers of friends so no issue with that. They do however, from time to time dedicate own time to do things but they are not asked. I care about the selling crypto related issue but thanks for the opinion.

[liuqi]

In this things payment purposes we can have cryptocurrencies payment on even App Store and Google Play Store but the government and the concern company should take action regarding that.
Then we might get the option to use the Bitcoin API on search application to resolve that issue.

[Theb]

Just to clarify you are asking if it is illegal if companies would instead use a ERC-20 token as their in-game currency? If you are then you are just complicating things for them, you see the closest thing to a cryptocurrency we have in the gaming industry is Razer Gold and it is allowable and legal since it is only a virtual credit and it's price is 1:1 to a dollar, it doesn't fluctuate like a crypto or token. A crypto or a token on the other hand that fluctuates or can be traded in an exchange would be very tricky to be made available on games since on a legal point of view they would illegally be functioning as an exchange especially when this token can also be bought and sold outside of it's interface. Not unless this token is similar to Razer Gold in a sense I don't see this being legal to be deemed as an in-game currency or virtual credit.

[dothebeats]

Imagine that you have a game, just like a mobile game (Jetpack Joyride, Subway Surfers, etc.)
We all know that those games allow for in-app purchases. Use money and get their in-game currency to
buy awesome stuff we all need like skins and pixel upgrades (#sarcasm).

Now put the situation where instead of the in-game currency you use an ERC-20 issued by yourself on the
test network (Ropsten, Rinkeby maybe?). For the in-game currency you use your test network ERC-20 and you sell it
for money just like companies sell their in-game currency. Are you committing an illegality?

It depends on where you operate. If your country recognizes ERC-20 tokens as a form of money then you may be subject to other regulations involving the issuance of such tokens for the purpose to be used as an in-game currency to buy goods. It doesn't matter if it came from your test network or from the main chain since it still falls under the 'currency/financial tool' category nonetheless. And I believe that testnet coins shouldn't be used for this form of activity since a testnet coin can be spec'd and modified anytime depending on whether or not the developer wants it to be.

And as per usual, at best seek legal advice from your legal adviser, an attorney or a legal practitioner for better understanding of what you want to achieve. Do not take any advice you take on this forum seriously as obviously, we all live in different regions that fall under different jurisdictions and interpretation of what seems to be the same law at its core.

[avikz]

It entirely depends on your country of operations! If crypto is not a legal tender in your county, then what you are planning to do is illegal. But if you are operating from a country like Japan, there's nothing illegal about it!

Mainly look at it like a business. Every business needs to have a base of operations and the legality is decided as per its local law. As simple as that!

[hugeblack]

Now put the situation where instead of the in-game currency you use an ERC-20 issued by yourself on the
test network (Ropsten, Rinkeby maybe?). For the in-game currency you use your test network ERC-20 and you sell it
for money just like companies sell their in-game currency. Are you committing an illegality?

The comparison is incorrect because the legal outlook differs fundamentally between them.

There will be no need to use ERC-20 tokens, you make things difficult, as you can write code and update the values in database.

The difference between tokens in that game and cryptocurrencies is that cryptos represents assets that have value outside the game so that you can use them to buy/sell real things or even convert them back into money and this concept differs from the concept of tokens that are inside that game.

[teosanru]

Imagine that you have a game, just like a mobile game (Jetpack Joyride, Subway Surfers, etc.)
We all know that those games allow for in-app purchases. Use money and get their in-game currency to
buy awesome stuff we all need like skins and pixel upgrades (#sarcasm).

Now put the situation where instead of the in-game currency you use an ERC-20 issued by yourself on the
test network (Ropsten, Rinkeby maybe?). For the in-game currency you use your test network ERC-20 and you sell it
for money just like companies sell their in-game currency. Are you committing an illegality?



The reason I am asking is because I have been working with young people (10yo - 18yo) to do my best to push
this industry forward by making it widespread amongst a young audience (the future!). So I have this leucoincards.com (beta Ethereum Rinkeby card game)
where it makes sense to sell our "in-game" currency just like other games do, but we are slightly unsure about it in this moment.

Well, first of all I must say this is a brilliant concept and shouldn't have been posted in a public thread   . Kidding .

Coming to the question there are various concepts involved in your whole concept legality of which can be described in various ways. Let's split it up into some parts.

1. Using ERC-20 tokens as in-app purchases: Now as you are using an in-app currency which naturally doesn't carries any major significance apart from that app. Moreover if you provide no way to transfer that coins away from the app then it's perfectly legal without any doubt. Moreover apart from being legal it would be quite appreciated as you are not just using a number to highlight in-app currency but a genuine blockchain backed currency and people would be dying to earn it if you keep redemption option too. Moreover considering that there are no glitches in your app. hacking your app and creating mod would become impossible.

2. Converting Fiat to In-app Currency: Now this is the most crucial part. Generally, apps are posted on google play and apple app store. Now Google play is pretty stringent with crypto policies and have known to ban some apps using cryptocurrencies. But generally they have banned those applications which use the user's mobile hardware to mine cryptocurrencies. In this case there is no such thing. if you create a intermediary portal so that google play transfer's money to your company and then you provide a similar amount of in-app cryptocurrency to user then I am pretty much sure it's perfectly legal.

3. You put your currency on a cryptocurrency exchange for sale: Now this is where things become tedious. You allow out of the apps withdrawal and then expect people to trade the currency too. In this case the pricing would be regulated by you and at the same time would float on market too. or maybe you decide to allow fair market pricing and sell your in-app currency as per market prices. In such a case google play might have some problem with you. Because indirectly you are using a google play app for generating cryptocurrency even though you are acting just like an exchange. This thing depends upon their interpretation.

4. Your country's reporting requirements: Now this is the biggest issue. In-app currency are worthless and if you make any money selling them that is your income. Similarly in this case too if you sell your erc-20 tokens and receive money that would be considered as income but the stock you have of unsold erc-20 tokens will carry certain value which need to be disclosed as your asset generated by you so I feel that would be your income even if it's not sold.

5. Working with Minors:It's not illegal to work for minors but any contract made with minor is not legally binding against the advantage of minor. So any sums recoverable from minor on his contract are not legally binding. It's better if you make contracts with their legal guardian on behalf of minor. Laws may vary from country to country but yes it's not illegal but not advisable due to this legality constraint.

Feel free to ask questions. I hope I am able to resolve your query.

[Baoo]

Well, the general idea is good, but difficult to achieve IMO. It is complicated and unreasonable if the companies will use ERC-20 tokens instead  in-game currency as a  payment in Google play, App store..ect. Furthermore,  it is impressive when many people are using their creativities through finding new ideas to improve the field of crypto but sometimes we need to be realistic otherwise we are going to lose a lot of time and efforts.

[imstillthebest]

Well, the general idea is good, but difficult to achieve IMO. It is complicated and unreasonable if the companies will use ERC-20 tokens instead  in-game currency as a  payment in Google play, App store..ect. Furthermore,  it is impressive when many people are using their creativities through finding new ideas to improve the field of crypto but sometimes we need to be realistic otherwise we are going to lose a lot of time and efforts.

realistic  ? do you think crypto is a joke   . no its not buddy , the idea of using a crypto on games has been discussed many times and infact some of the games were already approved but not mainly on the android and apple store  ( apps and games  ) but it was just an independent game mostly web games  .  crypto was already legal but legality on other means , like from your place  or from the company will depend if they will accept your proposal with crypto payments   .

[Muhammad haseeb dekay]

Imagine that you have a game, just like a mobile game (Jetpack Joyride, Subway Surfers, etc.)
We all know that those games allow for in-app purchases. Use money and get their in-game currency to
buy awesome stuff we all need like skins and pixel upgrades (#sarcasm).

Now put the situation where instead of the in-game currency you use an ERC-20 issued by yourself on the
test network (Ropsten, Rinkeby maybe?). For the in-game currency you use your test network ERC-20 and you sell it
for money just like companies sell their in-game currency. Are you committing an illegality?



The reason I am asking is because I have been working with young people (10yo - 18yo) to do my best to push
this industry forward by making it widespread amongst a young audience (the future!). So I have this leucoincards.com (beta Ethereum Rinkeby card game)
where it makes sense to sell our "in-game" currency just like other games do, but we are slightly unsure about it in this moment.

Ya it will be so good but it is not possible who give you money in butcoin just for playing games....mostly these types of things are scams