- Regulators said rules for investments in the physical world are same for investments in virtual worlds.
- Flamingo Casino Club failed to disclose its Russian ties.
- The club falsely claimed partnerships with legitimate businesses.
Regulators in five states, i.e. U.S. states of Alabama, Texas, Kentucky, Wisconsin and New Jersey have simultaneously filed emergency orders against the Flamingo Casino Club for allegedly committing a scam via NFTs tied to a metaverse casino.
On Wednesday, the Alabama Securities Commission, Kentucky Department of Financial Institutions, New Jersey Bureau of Securities, Texas State Securities Board and Wisconsin Department of Financial Institutions made an announcement that the Flamingo Casino Club has illegally solicit NFTs that it claims being tied to ownership rights of a casino in the metaverse. Moreover, the organization has approached investors through social media; thus, promoting NFT sales for the casino through influencers.
Furthermore, the regulators also alleged that beginning its operation in Russia in March 2022, the club claimed its partnership with the Flamingo Las Vegas casino, which is completely a false claim. The club has also been accused of cheating and fraud for claiming being partners with MarketWatch and Yahoo.
The five regulators said, “Not only is it allegedly concealing its connection to Russia, but the Flamingo Casino Club is also allegedly using a phony office address, providing a telephone number that is not in service, concealing its actual physical location and hiding material information about its principals.”
In addition, they accused the club of hiding details like material information and use of funds regarding negotiations for land purchase, which it claims to have purchased from the American Rapper, Snoop Dogg.
BREAKING: Five states order metaverse casino with alleged ties to Russia to halt sale of NFTs. Texas State Securities Board says casino’s pledge to donate portion of NFT profits to victims in Ukraine is false. My latest w/@TortorelliPaige + @scottzamost https://t.co/J4P69xUPaX
— Eamon Javers (@EamonJavers) May 11, 2022
As per a report by CNBC, Joe Rotunda, Texas State Securities Board Enforcement Director, said that the club lied when it claimed that a part of the NFT sales profits was donated to the war victims in Ukraine.
The five authorities also mentioned,
The same rules that apply to investments in the physical world continue to apply to investments in virtual worlds. Screen names are not a substitute for real names. Qualifications and experience matter. There are no virtual risks, just real risks of losing real money in a real scam.