The famous French start-up Sorare, which has just closed a record funding round of $680 million, ends up under investigation in Britain. The UK Betting Commission alleges that the company is operating without any gambling licence.
Sorare under investigation: what happened
“The Gambling Commission is currently carrying out enquiries into the company to establish whether Sorare.com requires an operating licence or whether the services it provides do not constitute gambling”.
This is the meagre statement with which the Commission announced the ongoing investigation.
The Commission thus warns users that the company may be operating outside the rules and does not wish to comment further. Sorare, on the other hand, responded that it did not need any licence to operate.
“When a product with a nascent technology becomes successful, such as Sorare’s digital collectable cards and game, it is normal and expected to be regulatory questions”, the company wrote in a statement published on Monday.
They added that after careful legal consideration, they came to the conclusion that their game should not be subject to any kind of licence.
Sorare, fantasy football on the blockchain
Sorare is a French start-up, founded in 2018, that has launched a sort of fantasy football through the sale of digital cards sold using the NFT auction model. The company has closed partnership agreements with more than 200 football clubs. In the last few days, it closed a deal with the Bundesliga for the use of the image rights of the main German league. In September, a partnership with the Spanish La Liga was closed.
In 2021, the French company seems to have had a real boom, considering that after the closing of the last funding round in July, its valuation jumped to $4.3 billion. Its digital fantasy football game has seen a real surge, with over 500,000 users and $150 million traded on the platform. In September, a Christian Ronaldo card was sold for a record 245,000 euros.
The union between football and cryptocurrencies is getting closer and closer, not least from the point of view of sponsorships. The Asian crypto exchange Crypto.com has become a sponsor of the Serie A League. Many clubs in the Premier League and major European football leagues have sponsors connected to the world of cryptocurrencies. According to Globaldata, in the first six months of 2021, the advertising and marketing investments of crypto companies in the world of sport reached $108 million.
Regulations and crypto
The news of an ongoing investigation into the Sorare company once again raises the question between regulation and the crypto world. Many central institutions, such as the Fed, Italy’s Consob, and the UK’s FSA, have repeatedly spoken of the need to regulate a market such as digital currencies. A market that is growing like wildfire (over 2 trillion dollars in capitalization) without yet having a precise regulatory code.
In recent months, the SEC, the supervisory authority of the American stock exchange, has placed a number of crypto companies under investigation for alleged violations of financial rules or for lack of authorization to operate on certain instruments.
China has resolved the problem in a drastic manner, deciding for a complete ban on all crypto-related activities. Other countries such as Switzerland or Canada have already approved a regulatory framework for cryptocurrencies.