GameStop ditches digital asset wallet, cites regulatory uncertainty

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Due to regulatory uncertainties, U.S. gaming retailer GameStop (NASDAQ: GME) will cease support for its digital asset wallet on November 1.

GameStop has struggled over the years as gaming consumers ditched brick-and-mortar stores for online platforms. As part of its revamp, the company has bet on digital assets and non-fungible tokens (NFTs), but as U.S. regulators crack down on the sector, the company is now reassessing its moves.

“Due to regulatory uncertainty of the crypto space, GameStop has decided to remove its iOS and Chrome extension wallets from the market on November 1, 2023,” the company said in a notice on its website.

“We advise that all customers ensure that they have access to their Secret Passphrase by October 1, 2023. Any customer to the Secret Passphrase has the ability to recover their account in any compatible wallet,” it added.

GameStop was at the heart of the 2021 meme stock rally in which retail investors pushed its stock from $20 to a peak of $483. The rally wreaked havoc on Wall Street as institutional investors who had shorted its stock lost $1 billion in a few days.

The meme stock rally would spread to digital assets, pushing the prices of tokens with no utility to new heights. Dogecoin was the most prominent beneficiary, shooting up 23,000% in 2021.

This tie-up has seen GameStop put digital assets at the heart of its revamp. Ryan Cohen, who took over as chairman in 2021, led the retailer to launch the wallet and, in July 2022, an NFT marketplace. The latter came at a time when the NFT mania was on the decline, and despite recording a strong first month, it’s been downhill since.

GameStop has hinted that it was reassessing its digital asset moves for months. Last December, then-CEO Matt Furlong stated that the company was treading lightly with digital assets despite their potential.

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not, and will not, risk meaningful stockholder capital in the space,” Furlong said.

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