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Sorare, a blockchain-based fantasy sports platform, is facing legal action in the UK for allegedly providing unlicensed gambling services. The UK Gambling Commission (UKGC) initiated the case, claiming the platform provides unlicensed gambling services.
This marks the first regulatory action taken by the UKGC against a Web3 platform. However, Sorare is fighting the allegations and exonerating its business operations.
Sorare Denies Gambling Charges as Industry Braces for Landmark Ruling
Sorare has firmly denied the charges, arguing that its business model does not fall under the UK’s gambling regulations. In addition, the fantasy platform noted that the Commission has misunderstood its operations.
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The platform’s spokesperson said these concerns will be addressed at the upcoming hearing on October 4, 2024, at the Birmingham Magistrates’ Court. It is worth noting that these concerns from the UKGC have been brewing since 2021. Back then, the UK regulator launched an investigation into whether Sorare’s use of NFTs and cryptocurrency violated gambling laws.
This breaking news has caused an uproar in the fantasy sports space and the crypto community. Players in the market and various platforms are on edge about the case’s implications. The big worry is that if Sorare gets a negative ruling, it could set a precedent for stricter blockchain and Web3 firms’ regulations. This is particularly true within the gambling and fantasy sports sectors.
Sorare Positions Itself at the Frontline of Fantasy Sports
Sorare is a popular platform that allows users to buy, trade, and manage collectible sports cards as Non-fungible tokens (NFTs). Users participate in fantasy games, including soccer, basketball, and baseball. Players can use these digital assets to participate in tournaments, potentially winning real-world rewards like cash and merchandise.
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The platform has established major partnerships with sports leagues, including the English Premier League and Germany’s Bundesliga. This impressive record underscores the platform’s effort to embed itself in the global sports landscape.
Interestingly, many individuals and even institutional investors are flocking to the crypto-gambling sector. This growing interest underscores the industry’s potential and allure.
Regulatory Scrutiny on Crypto Intensifies in the UK
This lawsuit against Sorare comes amidst a wider regulatory crackdown on crypto-related activities in the UK. The regulatory scrutiny focus extends to unregulated cryptocurrency ATMs, money laundering, and illicit activities ongoing in the industry.
Despite heightened regulatory scrutiny in the UK, many crypto exchanges and institutional players, including Nexo, Kraken, Coinbase, and Xapo, are actively expanding their operations there. This position shows that the European country has a strong tradition of financial innovation, making it an attractive destination for exchanges and institutional firms.
