Sorare Wants To Involve Government Regulators To Guarantee NFT Business Protection

JAKARTA - Non-fungible token (NFT) companies need to engage with regulators and share what they're doing, the chief executive of blockchain-based fantasy soccer startup Sorare said on Tuesday, November 2. They also recognize that NFT users need protection.

The popularity of crypto assets, which are blockchain-based records of ownership of digital goods such as images or videos, has exploded in 2021, leaving many confused as to why so much money is being spent on things that don't physically exist.

Sorare, whose last investment of $680 million is now led by Japan's Softbank, is currently being investigated by the UK Gambling Commission to assess whether his games - in which users play with encrypted digital football tokens that they can trade - fall within the realm of gambling.

"We need to engage with all the regulators, share what we're doing," Sorare CEO Nicolas Julia told Reuters at the Lisbon Web Summit. "We need to have some form of protection for users, and we're already talking to regulators."

Asked whether Sorare's game format, paired with the exponential growth of the NFT sector and its tendency to generate very fast returns, could prove dangerous, Julia said: "We have nothing to do with gambling."

Sorare hit a valuation of US$4.3 billion in September after two years of very high growth as the NFT sector boomed. Its investors include former England international Rio Ferdinand

NFT and other blockchain-based systems attracted a lot of attention at the Lisbon tech festival after Facebook's announcement that they would invest in creating a "metaverse" and rebranding the parent company to Meta.

Created in Paris in 2018, Sorare is an online game where users purchase officially licensed cards representing soccer players and build teams that compete against each other, with results based on an algorithmic assessment of the players' actual performance. Cards are traded as NFT.

Julia told Reuters that the start-up, which is interested in moving into other team sports including basketball, is in talks with all world sporting leagues or competitions and plans to expand to individual games such as tennis and golf.

Sorare - who Julia says is on track to hit $20 million in sales by 2021 - has Softbank's backing. They aim to use existing relationships with soccer leagues across America to grow the app's user base in the region.

"(Softbank) is clearly putting a big focus on NFT - they like the fact that this is a new market, and we are the leader in this category," Julia said when asked about the investment bank's strategy towards a fast-moving field that is not yet regulated by government regulation.