I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In today's post I will be looking at the recent announcement from GameStop that they will be exiting the crypto sector and shutting down their Non Fungible Token (NFT) marketplace.
GameStop Shuts Down NFT Marketplace
The video game retailer GameStop has announced its intention to close its NFT marketplace and in doing so signalled its withdrawal from the cryptocurrency space. The announcement was made via a statement on the platform and cites “the continuing regulatory uncertainty of the crypto space” as the primary reason behind its decision.
The companies NFT marketplace was officially launched on Halloween in 2022 and its focus was based on gaming assets. This was in tandem with a partnership with ImmutableX, an Ethereum layer 2 blockchain solution. It is the latest move by GameStop as it makes a gradual exit from the cryptocurrency space following the ending of its crypto wallet services back in August 2023.
The company has moved to assure its customers that they still have the option to sell their NFTs on alternative marketplaces, and these digital assets will remain theirs as they are hosted on the blockchain and not tied exclusively to any single platform. The platform will cease operations on the 2nd of February 2024.
It is a move that may not be surprising to many considering the relatively low impact it has had in terms of NFT trading, along with the fact the marketplace’s X account had remained inactive since September 2023. This indicates a disconnect between the company and its NFT community. The marketplace had supported gaming NFTs and other gaming collectibles across Loopring and Immutable X, both of which are Ethereum scaling networks.
When they formed these partnerships back in 2021, along with a small team to manage their NFT marketplace, GameStop created a $100 million fund in IMX tokens along with Immutable. However, just a day later GameStop cashed out a significant chunk of the IMX tokens with $47 million worth of IMX tokens being dumped onto the market. This should have been a clear sign that they were likely not a good fit for the cryptocurrency and NFT space.
The move by GameStop to withdraw from the NFT space reflects a strategic decision by the company which will enable them to refocus on the strengths of its core business. The company’s focus on crypto has diminished since the the departure of its CEO, who was responsible for driving GameStop’s crypto push.
They have also cited regulatory uncertainty as part of their reasoning for exiting the crypto and NFT space, which is often the chosen reason when a company decides to drawdown or fully cancel their digital assets initiatives. The decision by the company reflects their recent developments in the crypto industry, particularly the increase in enforcement actions by the United States Securities and Exchange Commission (SEC) under the leadership of Chair Gary Gensler.
The SEC brought lawsuits against both BINANCE and COINBASE back in June 2023, while also taking enforcement action against Kraken, Nexo, and Bittrex during the last year. Gensler has often noted his distaste for the cryptocurrency space and how the space is rife with fraud and bad actors. While a recent vote by the SEC, which won 3-2 in favour of allowing spot Bitcoin ETFs, the chair has remained against the crypto industry as a whole. Gensler noted:
“While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin."
Have a great day.
CryptoGod-1.
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