Korea Supreme Court rules virtual currency convertible

  12 Responses to “Korea Supreme Court rules virtual currency convertible”

1. Stabs says:

   January 12, 2010 at 4:09 am

   Hmmm.

   Is the world going to let Korea dictate that gold farming etc is legitimate and deserves legal protection?

   Is there a EULA get-out by having your EULA make players agree that all currency is property of the company not the player? So yes, currency is legally convertible, but l33tdude401 can’t sell you 5000 WoW gold because he doesn’t own it, Blizzard does.
2. Ravious says:

   January 12, 2010 at 5:35 am

   Kinda of meh on this. As far as I can tell from the Korean news stories (linked in the link) this was a criminal trial where the defendants were being fined. So the judge basically ruled that buying and selling virtual assets “gained from skill” in a game is not illegal. The issue of civil matters (i.e., the EULA, etc.) does not fall under this ruling. Again, as far as I can tell.

   IOW, the sky is not falling.
3. Brian says:

   January 12, 2010 at 5:40 am

   I am not sure, but the way I read it, it’s for the “free to play” games where you pay real money for ingame currency. Fair enough to me that you can get your money back for ingame currency you didn’t use.

   Now if it goes for gold farming too. I really hope that the game companies can and will do something against it.
4. Michael Hartman says:

   January 12, 2010 at 5:56 am

   I don’t think you should be able to get your money back even if you bought the currency in a free to play game. I can’t return half a gallon of milk to the store for half my money back, why should it be different for game currency?
5. Eolirin says:

   January 12, 2010 at 6:00 am

   EULAs have always been of questionable legality, so it’s not clear that putting language making users agree that they don’t own something actually makes a difference.

   But the issue of ownership is actually a bit of a misdirection; the real question isn’t whether Blizzard can claim that they own the currency, but whether they maintain the right to ban your account for any reason, even when you possess something of tangible value that you’d lose in the process. As long as that right exists, this is a non-issue. They may have no legal standing to prevent rmt (i.e. they couldn’t sue you or have you fined), but they’d be able to ban you all the same.

   The ruling in Korea is specifically about regulatory law; it’s illegal to cash out virtual currencies (and still is for games of luck or chance) as part of what appears to be anti-gambling legislation. This is creating an exemption for online games that don’t meet that criteria.
6. Yukon Sam says:

   January 12, 2010 at 8:07 am

   Click-through EULA terms aren’t even consistently enforcible in different jurisdictions of the United States, much less internationally. Some terms that have not been explicitly tested are very likely void in most jurisdictions (for example, IP claims to original player-generated content without compensation).

   Even if currency trading is clearly against the rules (or even against the law), roughly 20% of your player base will do it anyway. You have to design with that eventuality in mind if you’re trying to create any sort of economic system.

   One of the games I love to hate is Project Entropia. Because the company itself allows you to cash out virtual currency, the payout must be signficantly smaller than the inflow, and it goes disproportionately to the wealthiest players. The result is a miserly, miserable existance for new players that don’t invest big, as expenditures for ammo and repairs always exceed income from hunting or crafting. It’s like trying to make a living playing slot machines.

   But even if the trading is all third-party, the question remains; how do you keep Mr. Moneybags engaged and striving, without making every other player feel like a second-class citizen (which we get more than enough of in the real world, thanks).
7. PlayNoEvil says:

   January 12, 2010 at 8:52 am

   Thanks for the link, Raph.

   The biggest potential implications, as I wrote, could be for customer service and game security. You really need to keep track of what is in folks’ accounts. Fighting account theft and looting would be a real pocketbook issue for game companies.

   By the way, the Korea does have VAT on real money trading (as of September)… expect a bit better record keeping and reporting as well.

   @ Michael Hartman – as I noted as well, you are now able to cash out your unused gift card currency at stores in the US… pretty much the same thing.
8. J. Michael Monahan says:

   January 12, 2010 at 10:12 am

   The hard part of this rule is the gambling carve out.

   “Justice Min Il-young said that trading game money for cash should be punished only in cases in which it is obtained by online gambling games such as poker or other card games. ”

   For games that rely on the no-value element to avoid being defined as gambling, this rule (if adopted/imported into the US) creates a logic-loop.

   GameCo: My game is not gambling because game-gold has no value, so there is no value wagered or rewarded.

   State: forget your EULA, game-gold can be converted to real money unless your game is gambling

   FTC/Gaming Commission; I notice that your game-gold is convertable, so there is a value element. Go to jail, or get a gaming license for your online casino.

   Ugh.
9. Sara Pickell says:

   January 12, 2010 at 10:29 am

   I don’t think the ruling is actually ruling that all virtual currency must be convertible. Rather, that when one acquires virtual currency “through skill” then the labor involved is for them to profit from. In other words, so long as they worked for it, they are allowed to charge for it as a matter of recompensing that labor.

   The important thing is that this leaves everything in the player’s court. IF they want to charge others that’s fine, but the company does not have to guarantee it’s value. The game company is still not being forced to act as a bank, it’s just has no legal basis for fining people who RMT.

   At least, that’s how I understand this.
10. Dan Rosenthal says:

    January 16, 2010 at 6:24 am

    Raph, do you have a citation to this case (assuming the Korean Supreme Court has a citation format)? I’d love to use it in one of my upcoming articles.
11. Raph says:

    January 16, 2010 at 11:10 am

    I don.t… but if you follow the link chain backwards you may find one.
12. Morgan Ramsay says:

    January 16, 2010 at 2:19 pm

    I can’t return half a gallon of milk to the store for half my money back, why should it be different for game currency?

    Milk is a perishable good. Virtual Money is credit. They’re hardly similar. I haven’t looked into how virtual money is treated, but I think the gift card analogy is appropriate. Under bankruptcy law, anyone who has purchased a gift card is considered a creditor who has an unsecured claim. Such claims are generally paid, if at all, after priority and secured claims; however, bankruptcy law allows debtors to escape such debt. Gift cards make awful gifts for this reason.

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