DraftKings, a prominent American online betting service, announced the closure of its NFT marketplace three years after its launch. The decision also affects Rainmakers, a fantasy sports game based on NFTs, which will be suspended immediately due to recent legal developments.
The company did not elaborate on any specific legal issues but confirmed that market closures were a necessary response to those issues. DraftKings highlighted the difficulty of the decision, saying it was a strategic move to meet current legal expectations and protect its business and stakeholders.
The background to the shutdown includes a federal class action lawsuit that says DraftKings’ NFTs function as unregistered securities. The lawsuit reflects widespread regulatory scrutiny across the NFT sector, where concerns about copyright infringement, fraud and the use of digital assets for money laundering are increasingly spreading.
The U.S. Treasury recently highlighted the risks associated with NFTs, mentioning their vulnerability to theft and their use for various illegal activities. These factors contributed to a significant drop in NFT popularity, with sales dropping 63% in 2023, according to PYMNTS, a trusted global source that provides data, news, and insights on the latest payment methods.
The same goes for other companies
DraftKings’ actions are similar to those of other companies within the digital assets industry, such as GameStop, which shut down its NFT business citing regulatory uncertainty. These decisions highlight the volatility of the NFT market and the need for a clear regulatory framework to address numerous challenges.
DraftKings has guaranteed its customers that they can still access digital gaming pieces and NFTs through its My Portfolio page on its website. It is also offering cash payment options for customers who want to give up their Rainmakers gaming pieces, although certain terms and conditions apply.
While the NFT market is closed, DraftKings announced that it will continue to expand its core business areas. The company recently announced plans to launch a highly-rated online sportsbook in Washington, D.C., subject to regulatory approval. The expansion will mark Washington, D.C., as the 29th North American jurisdiction operated by DraftKings, marking the company’s continued growth in sports betting in the U.S. In the first quarter of 2024, DraftKings significantly widened its gap with market leader FanDuel, which accounts for 30% of total gaming revenue in the U.S., from 25% in the previous year. 파워볼사이트