Metaverse platform The Sandbox will require Know Your Customer (KYC) verification for its staking processes, according to an Aug. 3 announcement.
The announcement stated that only verified users could deposit The Sandbox (SAND) tokens, which are native to the platform, and claim staking rewards, while non-verified users will be placed into withdraw-only mode. Data from blockchain analytics firm Messari shows that 123 million SAND, or 6.7% of the token’s circulating supply, is currently staked by users. The Sandbox developers wrote:
“To enhance user security and compliance, we have implemented KYC verification for our staking process. Our goal is to ensure that our users’ accounts are verified before they can participate in staking or claim their earnings."
On June 6, Cointelegraph reported that SAND was one of 68 cryptocurrencies the United States Securities and Exchange Commission (SEC) deemed to be a security in its latest lawsuits against Binance and Coinbase. SAND was deployed on the Ethereum blockchain in 2012 by San Francisco gaming firm Pixowl. In 2018, Hong Kong-based Animoca Brands acquired Pixowl via its subsidiary TSB Gaming, intending to build a 3D metaverse utilizing blockchain technology.
Citing various initial exchange offerings and private sales conducted by developers over the years, the SEC alleges:
"The information TSB publicly disseminated has led SAND holders, including those who have purchased SAND since May 2022, reasonably to view SAND as an investment in and to expect to profit from TSB's efforts to grow the Sandbox protocol, which, in turn, would increase the demand for and the value of SAND."
Since the publication of the Coinbase lawsuit, Animoca Brands co-founder Yat Siu has criticized the lack of “consistency" regarding SEC regulations and praised Hong Kong’s shifting attitude toward blockchain.
To enhance user security and compliance, we have implemented KYC verification for our staking process. Our goal is to ensure that our users' accounts are verified before they can participate in staking or claim their earnings.
Unverified users can still withdraw their $SAND,…— The Sandbox (@TheSandboxGame) August 3, 2023
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