exclusions in the EMRs are extremely will need to understand whether their narrow, and it will depend on the products fall in scope or whether characteristics of each specific token they can rely on an exemption. and how it’s capable of being used. Anti-money laundering Unregulated tokens Video game developers will need Currently unregulated tokens fall to be aware of money laundering into three categories: exchange risks where players can convert tokens, utility tokens and stablecoins. monies into digital assets, trade While broadly speaking these are them with other users, and then all unregulated (although note liquify assets back into fiat currency the anti-money laundering or cryptoassets. considerations below), if tokens are Where games (particularly Web3 used to facilitate a payment service, games) incorporate the functionality then they may fall under the Payment to buy/sell in-game currency/ Services Regulations 2017 (PSRs) cryptoassets, the game developer subject to exclusions applying. will need to consider whether the Financial promotions cryptoasset-related activities are only used in the specific game The latest developments in environment, or whether they cryptoasset regulations brought can be exchanged for value that ‘qualifying cryptoassets’ into scope of can be used outside of the game the financial promotion regime from 8 environment and whether they October 2023. As with the success of need to be registered with the any new game, marketing is of huge FCA for AML purposes. importance; the ability for a game developer to invite or induce users Separately, where games enable to purchase in-scope cryptoassets players to buy/sell cryptoassets may impact on how they take their via external cryptoasset exchange product to market. Game developers providers these exchanges and wallet providers must be registered 68