The Securities and Exchange Commission has issued a no-action letter (NAL) saying that a digital token which aims to facilitate access to a multitude of online video games would not be required to be registered as an equity security. The NAL was sought by Pocketful of Quarters, Inc. (POQ) for its proposed “Quarters” digital coin.
As the first cross-game token being powered by the blockchain, Quarters decentralizes in-game currency which gives players a convenient new way to buy games, power ups, skins, and other premium items in their favorite titles. Notably, payers will no longer have to waste in-game currency in titles they no longer play.
How it Works
Quarters token, provides a player-friendly and industry-friendly alternative to in-game tokens traditionally locked to a single game. The Quarters smart contract provides this much needed trust by enabling everyone (players, developers and investors) to securely and transparently buy and use a prepaid arcade token.
With this recent regulatory relief coming from SEC, Quarters are now legal for all players to buy and use as a consumer product in the United States. Players can now buy 400 Quarters for a dollar using their credit card or in the Apple App Store and Google Play. With Quarters, gamers can play participating titles on mobile, web, and PC. Players can use Quarters to enter esports tournaments for the most popular games. Publishers and developers can collect Quarters and exchange them for Ether. Quarters have a fixed price, and like all premium game tokens, can never be exchanged or sold for financial value. They are said to be for entertainment purposes only.
Previously, in 2018, Pocketful of Quarters issued a security token (separate from the Quarters tokens) on Republic which raised $145,000. Holders of the Q2 security token are expected to receive 20% cash interest on the token. A whooping, 436 investors supported the offering.
Pocketful of Quarters was the concept of 13-year-old founder & Chairman, George B. Weiksner. In addition, Pocketful of Quarters has received the backing of famous VC Tim Draper. It also includes advisors like Michelle Phan (Co-Founder of Ipsy) and Chris Cross (Formerly of Blizzard Entertainment, THQ, EA, and DreamWorks Interactive).