GameStop’s quest for relevance—following meme-stock madness—won’t include crypto wallets, which it’s ending amid ‘regulatory uncertainty’
GameStop, once a giant among video game retailers, has seen its star fade for more than a decade, as consumers have turned to online marketplaces to buy their favorite games as opposed to brick-and-mortar stores.
The ailing retailer hoped a bet on crypto would partially reverse its decline, unveiling a new wallet, or place where users can store tokens and NFTs, in May 2022. However, on Tuesday, the company told users that it was discontinuing the wallet come Nov. 1, citing the “regulatory uncertainty of the crypto space.”
GameStop broadcast the decision via a banner on its page for the wallet, which runs on iOS and Chrome, Google’s internet browser. The video game company, whose stock once reached meteoric heights during the meme-stock craze of the pandemic, advised customers to ensure they have access to their seed phrase, or random string of words used to gain access to crypto wallets, by Oct. 1.
GameStop did not immediately respond to a request for comment when contacted by Fortune.
The publicly traded firm’s decision to abandon its crypto wallet is further evidence of corporate America’s squeamishness toward digital assets and Web3 amid a larger regulatory crackdown by the federal government, especially the Securities and Exchange Commission.
Meta, which rebranded itself after Mark Zuckerberg announced the company’s new focus on the metaverse, has suddenly shifted its rhetoric to focus on artificial intelligence. PayPal paused plans for a stablecoin after its partner in the project, Paxos, was reported to be under investigation by a New York regulatory body. And Robinhood, the very same app that helped propel GameStop’s stock two years ago, dropped a number of cryptocurrencies it previously listed on its exchange after the SEC said they were unregistered securities in lawsuits against Binance and Coinbase.
In 2021, while its share price rose from below $20 to a peak of $483 owing to a sudden appetite for joke, or meme, stocks, GameStop appointed Ryan Cohen, founder and CEO of online pet store Chewy, as executive chairman of its board.
Cohen quickly encouraged a slew of changes at the once-mighty retailer, and part of its search for relevance included bets on NFTs and crypto. After unveiling its crypto wallet, the company launched a new NFT marketplace. In the year since its beta launch in July 2022, it has seen only millions of dollars in monthly trading volume, compared with the hundreds of millions and billions Blur and OpenSea, the two largest NFT marketplaces, see per month. In June 2023, the firm fired CEO Matt Furlong, and Cohen assumed his position.