On Wednesday, regulators in five US states filed emergency orders forcing a metaverse casino with claimed Russian links to cease the sale of its Non-Fungible Tokens (NFT), claiming fraud, deception, and registration breaches.
Alabama, New Jersey, Texas, Kentucky, and Wisconsin are the five states of the United States.
Flamingo Casino Club‘s operators allegedly neglected to disclose their Russian links and claimed to have partnerships with respectable firms when they didn’t. The legal complaint reflects a fresh and concerted attempt by state authorities to oversee part of what is going on amid the metaverse’s phenomenal expansion, where innovation and speculation have also created fertile ground for alleged fraud, theft, and deceit.
State securities regulators in Texas, Wisconsin, Kentucky, New Jersey, and Alabama have issued a 22-page emergency cease-and-desist order, alleging that Flamingo Casino Club is making misleading statements and ordering the company to stop selling its non-fungible tokens, or NFTs, immediately.
What are NFTs?
NFTs are blockchain-based digital assets that designate whoever has the NFT as the owner of virtual art, music, or, in this example, the proprietorship of a metaverse casino. Furthermore, each NFT has distinct qualities that cannot be duplicated, demonstrating its genuineness.
In a press release, the regulators said that those NFTs “purportedly convey ownership of a metaverse casino and the right to share in the profits of the metaverse casino.”
Furthermore, the regulators explained, “Investors purportedly profit when patrons, acting as avatars, pay to play virtual craps, blackjack, roulette, and other games.”
Investigators began looking into the casino in March, not long after it opened, and said they could track down the perpetrators in Moscow. Then, various facts came into the limelight in an exclusive CNBC interview.
The casino heavily promoted its link with the Flamingo Las Vegas Hotel and Casino to gain investors’ faith.
According to regulators, potential investors were also tempted by what officials believe were false claims of affiliation with the Flamingo Las Vegas Hotel and Casino, a legal casino that has “no affiliation” or cooperation with the Flamingo Casino Club.
