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- Five State Lawmakers issued an emergency order to a virtual casino to take down its operation immediately.
- Apparently, the casino is affiliated with Russia, and it offered NFTs and attractive incentives to the holders.
- The regulators have been quite active in such actions as another virtual casino faced their scrutiny recently.
A virtual casino called The Flamingo Casino Club received emergency orders from five state securities regulators to instantly stop selling Non-Fungible Tokens (NFTs). These orders were issued against the metaverse casino because it is allegedly associated with Russia.
The filing was simultaneous by the agencies in Texas, Kentucky, New Jersey, Alabama, and Wisconsin; they accuse the Flamingo casino of rolling out operations in Russia this March and fraudulently soliciting NFTs.
The State law enforcement officials allege that the virtual casino operators failed to disclose their ties with Russia and falsely claimed to be associated with respectable businesses.
The Operators Offered Unbelievable Benefits
The NFTs holders from The Flamingo Casino Club were provided with virtual concerts, tennis courts, and poker tournaments as incentives. According to a website graphics, it read they give 50 percent of their casino’s profits to their NFT holders. It signified that it allowed the NFT holders the way to earn passive income.
These NFTs appear to transfer ownership of a metaverse casino and the right to share in the earnings of the metaverse casino, stated the press release by the regulators. And the twenty-two-page long order discloses that the offering is mainly a high-tech fraud.
Furthermore, the regulators highlight that the investors make a profit when the clients pay to play roulette, virtual craps, blackjack, and other games via avatars. They alleged that the virtual casino had ties with Russia as the regulators used a fictitious office location and an out-of-service telephone number.
According to Joe Rotunda, the Chief of Enforcement at the Texas State Securities Board, you are talking about digital assets and anonymous individuals who are masking their whereabouts. And that once the funds have been moved, they might not be able to retrieve them, and folks might lose everything.
Earlier in April, the operators of the casino told the investors that they were in negotiations with the popular rapper Snoop Dogg to acquire a block of property in the Sandbox metaverse. Still, the authorities clarify that there is no proof of such negotiations.
Not even a month ago, the Texas, Alabama, and Kentucky securities regulators also called out an online casino developer in Cyprus for offering NFTs as unregistered securities. And this is the second enforcement action issued by them.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
