(CTN News) – GameStop, a retailer of video games and consumer electronics, announced today that it will shut down its non-fungible token marketplaceFebruary 2nd. According to the company, the wind-down is due to the current regulatory uncertainty surrounding the crypto space.
It is a platform that allows users to buy, sell, and mint NFTs tied to video game themes and GameStop rewards that can be used in video games. It was launched in July 2022. However, GameStop has informed users that all transactions will be discontinued by early next month as a result of a message posted on the marketplace website.
It is important to note that existing owners of NFTs will retain ownership of their digital assets and can still trade them elsewhere, but GameStop will remove the ability to purchase, sell, or mint new NFTs on its platform.
GameStop’s decision comes amid a slump in NFT sales
A strategic shift away from blockchain marks GameStop’s departure from its original plan to integrate NFTs and crypto into its turnaround strategy. As part of its efforts to restore its fortunes, the struggling retailer has invested heavily in the development of an NFT team and market infrastructure.
The NFT market, however, has reached its bottom over the past few months. It is estimated that monthly NFT trading volumes have declined by over 97% from their peak, eroding customer demand. GameStop’s decision was likely influenced by the lack of user traction combined with ongoing uncertainty regarding crypto regulations.
In particular, the United States has taken a stance that is uneven in terms of crypto oversight. While the SEC recently approved Bitcoin ETFs in a move towards acceptance, legislation such as the Infrastructure Bill introduced tax reporting requirements that some industry leaders believe hinder innovation.
As a result of GameStop’s abandonment of its NFT experiment, the precarious nature of crypto both as an investment and as a means of doing business has been highlighted. Regulators are uncertain, combined with free-falling asset values, which are forcing many players to leave the market.