The Sandbox, a metaverse platform, has initiated Know Your Customer (KYC) verification for its staking procedures, as declared in an announcement on August 3rd. Verified users are now exclusively permitted to deposit The Sandbox’s native tokens and access staking rewards, while non-verified users are limited to withdrawing staked assets without the ability to make new deposits.
Blockchain analytics firm Messari’s data reveals that currently, 123 million SAND tokens, equivalent to 6.7% of the circulating supply, are staked by users. In an effort to augment user security and ensure compliance, The Sandbox’s developers have introduced KYC verification for their staking mechanism, aiming to validate user accounts before participation in staking or claiming earnings.
Citing the SEC’s classification of SAND as a security, The Sandbox became one of the 68 cryptocurrencies implicated in the United States Securities and Exchange Commission’s legal actions against Binance and Coinbase, as reported by Cointelegraph on June 6th. Initially deployed on the Ethereum blockchain in 2012 by San Francisco gaming company Pixowl, SAND later came under the ownership of Hong Kong-based Animoca Brands through its subsidiary TSB Gaming. Animoca Brands sought to construct a 3D metaverse leveraging blockchain technology.
The SEC alleges that various initial exchange offerings and private sales conducted over the years have led SAND holders, including those purchasing the token since May 2022, to view SAND as an investment and anticipate profits from The Sandbox protocol’s growth, thereby increasing the demand for and value of SAND.
In response to the Coinbase lawsuit, Animoca Brands co-founder Yat Siu criticized the inconsistency of SEC regulations and praised Hong Kong’s evolving stance towards blockchain technology. As The Sandbox navigates these regulatory dynamics, the introduction of KYC measures reflects a proactive approach to enhance user security and align with evolving compliance standards.