Should Influencers with Insider Knowledge Be Allowed to Talk About Token Prices?
A conflict has emerged between crypto influencer Jesus “Classy” Martinez and blockchain gaming company Gala Games regarding whether influencers with insider knowledge should be allowed to publicly discuss token prices. Gala Games removed Martinez from its creator program due to concerns that his videos were too focused on ROI and token-centric content.
Gala Games’ creator program aims to spread awareness about the company and bring creators together through an exclusive Discord server. Approved creators receive a monthly grant of $1,000 worth of GALA tokens to give away during livestreams or events.
In response to Martinez, Gala Games’ President of Blockchain Jason Brink explained that they do not want creators who primarily focus on tokens to be part of the program. The company wants to avoid incentivizing content that creates a liability for the project as a whole.
The Dilemma for Blockchain Gaming Influencers
Blockchain gaming influencers often cover crypto games because they are interested in the financial aspects of the industry, such as owning game assets and trading NFTs and tokens. Expecting them not to focus on blockchain elements is contradictory.
While Gala Games allows “moonboys” (investors who are solely interested in token prices) in their ecosystem, they do not provide them with insider information. Front-running or making public predictions about token prices may not make Gala legally liable, but influencers who violate Gala’s terms of service could be held accountable.
Potential Legal Risks and Securities Laws
Todd Phillips, assistant professor of law at Georgia State University, believes that Gala Games itself is unlikely to be legally liable if they have policies in place to prevent insider trading through their terms of service. However, influencers who violate Gala’s terms could face liability under securities laws.
Gala Games’ terms of service state that users should not engage in creating, offering, selling, or buying securities and must comply with the law. While Gala Games claims that their Gala token is a digital reward and not a security token, incidents could still be subject to securities law.
It is ultimately up to judges to decide whether tokens used in Gala Games’ platform are securities or not. Last year, a former OpenSea executive was found guilty of insider trading NFTs, despite claiming that NFTs aren’t securities. The executive is now attempting to appeal the verdict.
Hot Take: The Role of Influencers in Blockchain Gaming
The conflict between Gala Games and Jesus Martinez highlights the challenges faced by influencers in the blockchain gaming industry. As the industry evolves, influencers play a crucial role in educating and engaging with the community. However, striking a balance between providing valuable insights and avoiding potential legal risks can be tricky.
Gala Games’ decision to remove Martinez from their creator program reflects their cautious approach towards influencers who heavily focus on token prices. While it’s important to prevent insider trading and protect the project’s integrity, completely excluding influencers with knowledge and passion for blockchain gaming may hinder community engagement.
Ultimately, finding a middle ground where influencers can provide informative content without jeopardizing legal compliance will be crucial for the future of blockchain gaming.
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