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9 May, 2024

Navigating Security and Compliance: Cryptocurrency Payments in iGaming

In recent years, the rise of cryptocurrencies has disrupter various industries, including iGaming. As more players seek the speed, ease, and security that cryptocurrencies offer, more and more online casinos and sportsbooks are integrating cryptocurrency payments in iGaming and payment systems. However, white the allure of the digital currency revolution is enticing, it’s crucial for operators to understand the complex landscape of security and compliance that comes with accepting cryptocurrency payments in iGaming operations. This article will explore some of the things you need to know about navigating the iGaming landscape as you integrate crypto into your existing operation, or as you consider starting a crypto casino.

Security challenges

Cybersecurity threats: While cryptocurrencies boast robust encryption and decentralized networks, they are not immune to cyber threats. People can still trick players into giving up account information, seed phrases for web3 wallets, and other personally identifiable information that would give them access to crypto wallets. For both players and operators, fortifying systems and accounts against hacking attempts, phishing attacks, and malware that target cryptocurrency wallets and transactions are as important as the measures you would take for regular banking info.

Transaction anonymity: While anonymity is a desirable feature for many users, it also presents challenges for regulatory compliance and fraud prevention when you accept cryptocurrency in iGaming operations. Ensuring responsible gambling practices becomes more challenging when players can gamble anonymously with cryptocurrencies. Even when using cryptocurrency payments in iGaming, online casino and sportsbook operators still need to implement the same AML and KYC as they would for an iGaming operation that accepts fiat currency. More on that topic later.

Wallet security: This was already touched on in the previous section around cybersecurity threats, but it’s important to reiterate. Cryptocurrency wallets are susceptible to theft if proper security measures are not in place. Educating players about securing their wallets and implementing multi-factor authentication can mitigate this risk. Of course, the onus is on players to ensure they are safeguarding their information to the best of their ability, but it is the sign of a reputable operator to offer educational content that could help secure player accounts and wallets to an even higher degree.

Compliance considerations

Regulatory uncertainty: The regulatory landscape surrounding cryptocurrencies payments in iGaming varies greatly across jurisdictions. Online gambling operators must stay abreast of evolving regulations and ensure compliance with anti-money laundering (AML) and Know Your Customer (KYC) requirements. Leveraging industry publications such as European Gaming, Asia Gaming Brief, iGaming Business, and SBC News are great resources for operators to stay on top evolving regulations around cryptocurrency payments in iGaming.

AML and KYC compliance: Cryptocurrencies are often associated with money laundering and illicit activities due to their pseudonymous nature. Online gambling platforms must implement robust AML and KYC procedures to prevent money laundering and ensure that players are of legal age. Again, AML and KYC procedures are mandatory for any licenced crypto casino. To learn more about gambling licences and crypto, check out our article on everything you need to know about gambling licences in 2024.

Tax implications: Cryptocurrency transactions may have tax implications that vary depending on the jurisdiction and the amount of cryptocurrency involved. Operators must consult with legal and tax experts to understand their tax obligations and ensure compliance with tax laws. Tax implications can vary from jurisdiction to jurisdiction, so it’s important to get advice from tax experts in the jurisdiction your business is registered in.

Best practices

Partner with reputable payment processors: Collaborating with established cryptocurrency payment processors can streamline the integration process and provide additional security and compliance expertise. Opting for white label crypto casino or sportsbook software such as Lion Gaming’s Fer0x Crypto Casino and Fer0x Crypto Sportsbook solutions give you access to reputable payment processors for both crypto payments and fiat payments.

Transparent policies: Clearly communicate your cryptocurrency payment policies to players, including transaction fees, processing times, and any restrictions on cryptocurrency usage. Transparency is king when it comes to payments, and your players will appreciate knowing what to expect when they transact with your platform.

Regular audits and compliance checks: Conduct regular audits of your cryptocurrency payment system to identify and address security vulnerabilities and ensure compliance with regulations. The Ultimate iGaming Operator Finance Playbook has a dedicated section on audits – make sure to download it today to be prepared for that aspect of running an iGaming operation.

Educate players: Provide educational resources to help players understand the benefits and risks of using cryptocurrencies for online gambling. Encourage responsible gambling practices and provide support for players who may be experiencing issues related to excessive cryptocurrency use.

In conclusion, while accepting cryptocurrency payments in iGaming can offer operators numerous benefits, it also presents some security and compliance challenges. By prioritizing security measures, staying informed about regulatory requirements, and implementing best practices, you can navigate the complexities of cryptocurrency payments while ensuring a safe and compliant gaming environment for their players. If you want to know how Lion Gaming’s web3 casino software and team of experts can help you navigate the landscape, contact us today and we’ll be happy to share how we can help.

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VP of Operations
c.lewis@liongaming.io

Christine Lewis

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      Lion Gaming Group Inc.
      855 2 St SW #3500
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      T2P 4K1 Canada
      Our address
      Lion Gaming Group Inc.
      855 2 St SW #3500
      Calgary, AB
      T2P 4K1 Canada
      Our address
      Lion Gaming Group Inc.
      855 2 St SW #3500
      Calgary, AB
      T2P 4K1 Canada