In a major development, IMVU, the digital avatar social network, has been granted permission by the US Securities and Exchange Commission (SEC) to sell its digital token to users.
Last week, the US markets watchdog published a “no-action letter” detailing under what conditions IMVU could sell its upcoming VCOIN in-game currency. The SEC said that it would not recommend enforcement action if “IMVU offers and sells VCOIN, which is transferable both on and off of IMVU’s platform”.
The recent ruling recognizes VCOIN as a non-security and marks the first time a no-action letter is issued by the SEC with regards to a digital asset that can be converted back to fiat by users. The regulator’s approval is contingent on IMVU’s compliance with several requirements, including imposing limits on VCOIN purchases, conversions, and transfers, maintaining a fixed price and implementing KYC/AML checks for users wanting to transfer their tokens off the platform.
In a subsequent press release published Friday, IMVU said that following the VCOIN launch, scheduled for January 2021, its users will be for the first time able to transfer “a digital asset off the IMVU platform to convert it to fiat”.
The company had already built a massive in-game economy with players able to spend Credits on a massive catalog of user-generated digital content, but there was no way for content creators to earn fiat money for their effort. VCOIN was proposed as a solution to this problem and LimeChain was chosen to spearhead the development effort.
“Users of IMVU, and really all virtual and game users, want to be able to earn real value for the services and goods they offer and VCOIN will be the first to provide this,” IMVU’s chief strategy officer, John Burris, said in the press release. “Launching VCOIN into the high-velocity IMVU economy, it could quickly become one of the most active, largest, and user-focused digital asset economies in the space.”
LimeChain was the blockchain development partner of IMVU throughout the whole token creation process. VCOIN was built on Ethereum, using the protocol’s ERC-20 standard for issuing tokens. LimeChain also helped IMVU by building a dashboard tracking the global movement of the VCOIN tokens.