Two Games, Eighteen Days: The Court Cases That Sealed Korea's P2E Ban

For a few weeks at the end of 2021, Korea had a hit crypto game. Muhandolpa Samgukji Reverse (무한돌파삼국지 리버스), a Three Kingdoms mobile RPG, briefly topped the popularity chart, and reports said players could earn around 10,000 won an hour in tokens. Then the regulator pulled the plug, the developer sued, and Korea's first real court test of play-to-earn began.

It ended in January 2023. On the 13th, the Seoul Administrative Court dismissed Skypeople's case over Five Stars for Klaytn. On the 31st, a different panel of the same court dismissed Natris's case over Muhandolpa Samgukji Reverse. Two games, two studios, one answer: Korea's Game Rating and Administration Committee (GRAC) was right to keep P2E games off the market. As of November 2026, we found no ruling that has reversed that answer.

Case one: Five Stars for Klaytn

Skypeople launched Five Stars for Klaytn (파이브스타즈 for 클레이튼) on Google Play and the Apple App Store in Korea in 2020. It ran on Klaytn, the blockchain developed by GroundX, a Kakao subsidiary, and Skypeople issued its own token, MNR (Mineral). In-game items could be turned into NFTs and traded.

Mobile games in Korea usually receive their age rating through the app stores' self-rating system. GRAC can review those ratings afterwards, and in 2021 it cancelled the game's self-rating on its own authority, citing gambling concerns. It later rejected a fresh rating application too. Skypeople sued in May 2021 and asked for an injunction, which the court granted in June 2021, so the game stayed online while the main case went on.

What the court said about NFTs

In court, Skypeople argued that NFTs earned in the game and traded on marketplaces such as OpenSea were no different from ordinary item trades. GRAC argued that the NFTs were prizes, comparable to point vouchers, which the Game Industry Promotion Act prohibits, and that cash-convertible NFTs combined with random draws (gacha) and auto-hunting could encourage gambling.

Administrative Division 4 sided with GRAC. As reported, the court found that NFT items:

• stay with users permanently, whether or not the game keeps running;
• can be bought and owned by people who do not play the game;
• circulate freely through exchanges, which supports treating them as property with real value.

The court also noted that when a game issues a very large number of NFTs, they can behave like ordinary interchangeable tokens. On the question of whether a game is gambling-like, it gave weight to GRAC's expert judgement.

Case two: Muhandolpa Samgukji Reverse

Natris's game was more direct. Players earned the Mudol token through quests, and that token could be swapped for Klaytn's coin, which traded on exchanges. Widely described in the Korean press as the country's first P2E game, it launched through app-store self-rating.

GRAC cancelled its rating on 24 December 2021. Natris sued two days later. A provisional order briefly let the game return, but on 14 January 2022 Natris announced that the court had rejected its injunction request, and the game left Google Play and the App Store. The Seoul High Court also turned down its appeal on the injunction. Natris relaunched the game as Muhandolpa Samgukji Reverse L, with the token removed.

What the court said about tokens

On 31 January 2023, Administrative Division 8 dismissed Natris's suit. GRAC was represented by the law firm Yulchon, which called it the first court ruling on whether crypto-paying P2E games break the game law. The reasoning, as reported, had four steps:

1. The token is a prize. It falls under Article 28(3) of the Game Industry Promotion Act, which bars prizes that encourage gambling, and the court read that clause in light of lawmakers' aims after the 2006 Bada Iyagi arcade scandal (the scandal explained). 2. It is not like a normal item. Ordinary items are licensed to users and owned by the publisher. The Mudol token was built for market trading and was not essential to the game, as the token-free version proved. 3. Item broker sites are different. Natris pointed to the gray market in other games' items. The court saw those as private peer-to-peer trades, often against game terms, not something the publisher runs. 4. It may be a new kind of gambling game. Handing out crypto to attract users turns them into crypto investors exposed to price swings, which the court said can fall within the law's definition of a gambling game regardless of the game's content.

The Lineage question

Natris's best argument was a comparison every Korean gamer understands. Lineage gold and items change hands for cash on broker sites every day, and in a case reported in January 2010 the Supreme Court acquitted a seller of Lineage game money. The appeal court in that case had found that ordinary online game money is not "game money obtained by chance", the category the enforcement decree bans from exchange, and the Supreme Court accepted that view.

So why should a token be treated differently? The 2023 court's answer was about who runs the market. In Lineage, players trade among themselves, often against the game's terms. In a P2E game, the publisher designs the token, lists it and builds the game around earning it. One is a side effect of a popular game; the other is the business model.

Why nobody has cracked the ban since

The two rulings closed the obvious routes. NFTs were prizes. Tokens were prizes. Self-rating could be cancelled. A legal source quoted after the Natris ruling put it simply: P2E games are unlikely to be distributed in Korea unless the law itself is amended.

Some lawyers think the courts went too far. One Korean law column accepted that NFTs can encourage gambling in some cases but questioned whether game NFTs should count as prizes at all, and warned that heavy regulation could undercut government support for blockchain development. Those arguments now live in the National Assembly, not the courtroom (the bill debate).

By the numbers

• 2020: Five Stars for Klaytn launches in Korea
• May / June 2021: Skypeople sues and wins an injunction
• 24 December 2021: GRAC cancels the Muhandolpa rating
• 14 January 2022: Muhandolpa's injunction request is rejected; the game leaves app stores
• 13 January 2023: Skypeople loses at the Seoul Administrative Court
• 31 January 2023: Natris loses at the Seoul Administrative Court

What to watch

Both studios had the right to appeal, and Skypeople said it would review the ruling first. We could not find reports of a higher court overturning either decision. The more important front is the 2025 bill to rewrite the game law, which would narrow the prize ban that both rulings rested on.

WGC's take: These cases were never really about two mid-sized mobile games. They were about whether a token can be a toy. Korea's courts said no, and until lawmakers change the words in the law, every Korean studio will keep building its blockchain games for players somewhere else (the ban explained).