In crypto games, users get rewarded with tokens for their participation. But are gaming content creators with insider knowledge allowed to talk publicly about these tokens and their highly volatile prices? Well, this question led to a conflict between crypto gaming firm Gala Games and content creator Jesus “Classy” Martinez earlier this week.
Gala Games dismissed Martinez from the company’s creator program on the grounds that his latest videos are “too focused” on the return on investment.
In an X post, while informing his followers what Gala Games had done to him, Martinez narrated how he had spent thousands of hours pushing the gaming project to ensure it witnessed massive adoption. He revealed that he created a community tournament for Spider Tanks, a game developed by Gala, without asking for help from the firm.
The content creator also said his videos about price predictions were realistic, adding he doesn’t own significant amounts of any Gala Games tokens.
According to Gala Games Director of the Blockchain division, Jason Brink, the company’s creator program is an initiative created to raise awareness about the Gala game and bring numerous gaming content creators together via an exclusive group on Discord. Creators on the program receive $1,000 in GALA, which they are required to give away to their supporters during IRL events or livestreams.
Brink Responds to Martinez Post
Responding to Martinez’s X post, Brink said since crypto influencers in the Gala Games’ creator program will be receiving exclusive information regarding Gala’s upcoming developments, the company does not want to work with any creator who focuses on the tokens’ price performance.
Brink then praised Martinez for being an excellent creator but said his content no longer aligned with Gala Games’ marketing strategy.
Why Most Content Creators Have Turned to Crypto Games
Like Martinez, most gaming influencers have chosen to focus on Web3 games rather than Web2 games mainly because they desire to explore all the financial elements of these games. Most content creators own NFTs and gaming tokens, so expecting them not to talk about the prices of digital assets they own is really tough.
And given that several gaming projects are looking to reward players with token airdrops over the coming months, it is highly unlikely that gaming content creators will stop talking about the financial aspects of Web3 games.
Gala Games has issued several tokens, including SILK, MTRM, ETIME, GALA, MUSIC, and TOWN. Crypto users earn them by playing various games developed by the gaming company. Brink says issuing exclusive information about these tokens to content creators who make videos about price prediction can bring legal problems to Gala Games.
Can Creator’s Behavior Cause Gala Games Legal Problems?
But is that true? Todd Phillips, a law professor at Georgia State University, has the answers. He says it is unlikely that what a content creator does would make Galas Games legally liable for their behaviour.
Philips, who regularly advises the United States regulators and Congress members on crypto regulations, adds that so long as Gala Games has adopted policies to prevent insider trading, it cannot be held liable for influencers’ behaviour.
However, the law professor says content creators who violate the gaming company’s Terms & Conditions regarding insider trading could be held legally liable. But, at the moment, Gala Games doesn’t have Terms & Conditions designed for content creators.
Are Gala Games’ Tokens Securities?
Meanwhile, Gala Games’ Terms & Conditions argue that the company’s tokens are “digital rewards,” not securities. However, Phillips says the gaming firm doesn’t decide whether its tokens are securities or not. That’s determined by the court judges.
For example, in 2023, an American judge found an ex-executive official of NFT marketplace OpenSea guilty of participating in insider trading. The official argued that NFTs were not securities and that the securities rules the judge used to make the ruling did not apply. The judge, however, was not convinced, and now the accused is attempting to appeal the verdict.
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