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Is the exchange of tokens for goods/services a form of payment?

Los Angeles, CA |

If tokens are used instead of money for the exchange for goods/services, is such an exchange regarded as a form of payment? Tokens as in those used in arcades, car wash, laundries, etc.

Attorney Answers 3

Posted

Yes it is consideration

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Asker

Posted

According to Wikipedia: "A payment is the transfer of money from one party (such as a person or company) to another". Although the tokens were bought, they themselves are not money though. So how come the exchange is still regarded as payment? Is it not barter?

Posted

Yes, it is possible.

The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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Asker

Posted

So what does it depend on? In a standard arcade or car wash scenario, is it regarded as a form of payment?

Michael Charles Doland

Michael Charles Doland

Posted

There is a real question behind your academic question. I am not running a law school class. Is your question about barter? Is this a homework assignment. What is the legal issue afftecting your life?

Asker

Posted

No, it's not a homework assignment. I'm going through Google's policies that apply to mobile apps. One of the clauses says: "Developers offering additional content, services or functionality within an application downloaded from Google Play must use Google Play's payment system as the method of payment..." So I wonder whether if the user can redeem tokens for 'additional content', according to the policy. It seems that if such an exchange isn't seen as a form of payment, then it wouldn't fall within the clause; and thus, no need for Google Play's payment system.

Michael Charles Doland

Michael Charles Doland

Posted

I think you need to put together a very sizable litigation budget for the the litigation with Google. Your additional facts finally made your question comprehensible.

Posted

Yes. The value of the exchange would be the fair market value of the services provided. They would disregard the tokens and look at the form of the transaction. The tokens might play into whether income was recognized when received under the accrual method, but either way, it will be recognized when services are performed. Consideration can take all different forms and it is almost impossible to make transactions between unrelated parties non-taxable by changing the "currency."

Christopher Larson
Insight Law

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