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Sabastien Borget, co-founder and Chief Operating Officer of The Sandbox, responded today to the bombshell lawsuits filed against two leading crypto exchanges this week—and addressed the impact of its SAND token potentially running afoul of U.S. securities laws.
The United States Securities and Exchange Commission (SEC) ramped up its crypto enforcement this week, targeting leading exchanges Binance and Coinbase with lawsuits on back-to-back days. As part of the action, a slew of tokens has been named by the SEC as unregistered securities—including SAND from the Sandbox metaverse game.
SAND was among dozens of cryptocurrencies and tokens that the agency identified as such this week, joining other notable coins like Solana (SOL), Polygon (MATIC), and Cardano (ADA), along with the AXS governance token of fellow NFT game Axie Infinity and Decentraland's MANA token.
“We are obviously aware of the litigation advanced against Binance and Coinbase in the U.S. from the SEC,” Borget said during a press event at the Non Fungible Conference (NFC) in Lisbon. “We do not necessarily agree with the characterization that’s been put in that litigation, including the qualification of SAND as a security there.”
Borget added that The Sandbox’s token has “been named,” but added that the team is “not ourselves directly subject to litigation.”
“This doesn’t change our business on a day-to-day basis,” he added.
While the SEC’s suits against the exchanges arrived in tandem, on Monday and Tuesday respectively, its charges against Binance and Coinbase vary.
Binance was targeted for allegedly offering and selling unregistered securities, not restricting access by United States-based users to its international exchange, and running an unregistered exchange, broker, and clearing agency. Coinbase, meanwhile, was also sued for that last allegation, along with allegedly operating staking services that provide interest-like earnings for token holders.
The moves came amid a broader U.S. crackdown on crypto companies led by SEC Chair Gary Gensler, who told CNBC on Tuesday, “We don’t need more digital currency.”
The Sandbox is an Ethereum-based metaverse game that lets users own and customize land plots (sold as unique NFTs), along with avatars and other in-game content, in a free-to-play game that still has yet to launch fully. The SAND utility token is used for purchases along with features like decentralized governance voting.
We're here at @NFCsummit Lisbon 🇵🇹🎮 alongside gaming studios @GamerHashCom, @Pickaxe_Master, @hermitcrabgame, and @VoxelArchitects 🎮🛠️
Are you attending? Come chat with the incredible creators at The Sandbox Street! pic.twitter.com/gRl5YgqmEx
— The Sandbox (@TheSandboxGame) June 7, 2023
Over the last few years, The Sandbox has inked partnerships with hundreds of celebrities and brands that are building within the world, including rapper Snoop Dogg, entertainer Paris Hilton, Warner Music Group, video game publisher Ubisoft, skateboarder Tony Hawk, apparel brand Adidas, and entertainment brand The Walking Dead.
Despite the regulatory threat, Borget emphasized at NFC Lisbon that “the U.S. is still an important market for The Sandbox,” highlighting that the game has seen approximately one-third of its users come from the country.
He added that the concept of a decentralized game world in which users can own assets and contribute game content is “an important mission that should go on.”