Korean government regards blockchain-based game ‘illegal’

"Klaytn Knights" promotional image

Game Rating and Admission Committee says,
“There will be a further investigation after the release of Klaytn Knights”
Game Industry, “Domestic service may be impossible if Klay goes on the list”

"Klaytn Knights" promotional image
“Klaytn Knights” promotional image(https://klaytnknights.io/)

‘Klaytn Knights’, a mobile game developed on Kakao’s blockchain platform ‘Klaytn’, is about to undertake heavy censorship prior to its release by Korean gaming authorities for its ‘gambling features’. Officials view that ‘it may be against positive law’.

According to the relevant industry on Jul. 16, a mobile game developer, Biscuitlabs, has announced on their website that they will give out 100 Kakao’s cryptocurrency token ‘KLAY’ to 777 pre-subscribers through a draw. It did not state the specific time table on the give-outs.

The problem is that Game Rating and Administration Committee (hereinafter, GRAC), a subsidiary of Ministry of Culture, Sports, and Tourism, is keeping their negative stance on utilizing cryptocurrency for the game promotion.

In accordance with article 21 of the Game Industry Promotion Act, a game service supplier of PC · mobile games must receive game rating prior to the production or release of its games. However, 7 big publishers such as Google, Samsung Electronics, and Kakao Games are classified as the ‘Self-Regulation Publisher’ and may distribute their games after self-regulation, except for rated R(18+) games.

However, GRAC has rated a cryptocurrency game, ‘Yuna’s Closet’, last year as ‘Rate Pending’. Even though the game was distributed by Kakao Games, it is practically prohibited from distribution in Korea. According to GRAC, the fact that the cryptocurrency ‘Pixie Coin’ obtained from the game can be transferred into cash means that the game can be classified as gambling.

It is speculated that the government is concerned about online casino games such as gostop and poker going rampant with cryptocurrency. A source from the industry said, “Though 3 to 4 of domestic game companies are currently planning to launch blockchain games, GRAC’s decision on Kakao DApp will largely influence their future. Actually, whether KLAY will be traded at exchange platforms will be the foremost important standard.”

An official from GRAC explained, “As both the game and the token are not released yet, it doesn’t seem to make any problem now. But it may cause a problem after the game’s released, depending on how these tokens are distributed.”

Song, Hwayeon(2019. 07. 16.) 카카오코인 받고 게임한다? 블록체인 게임 사행성 논란
News 1, retrieved from http://news1.kr/articles/?3671703