Five U.S States Issue Ban Against Metaverse Casino

Five U.S States Issue Ban Against Metaverse Casino

Last week, regulatory agencies from five different states simultaneously filed emergency orders against a virtual casino, which is set in the metaverse and accepts cryptocurrency instead of fiat money.

The state agencies alleged Flaming Casino Club has connections to Russia and that has been operating in the metaverse. The metaverse is a digital world in which users can interact with one another, buy products, and even gamble on the outcomes of virtual events.

Metaverse Casino

Cease and Desists Order Against Metaverse Casino

State law enforcement officials accuse the operators of Flamingo Casino Club of failing to declare their connections to Russia and falsely claiming to have links with legal firms when in reality they do not. 

The civil filing is part of a new and coordinated effort by state regulators to police some of what is going on amidst the meteoric growth of the metaverse.

 In an environment where innovation and speculation have also provided fertile ground for criminals engaged in alleged fraud, theft, and deception, the metaverse has become a hotbed for such activity. State securities boards in the states of Texas, Wisconsin, Kentucky, New Jersey, and Alabama have joined together to issue a 22-page emergency cease-and-desist order against Flamingo Casino Club. The order outlines what the state securities boards believe to be false claims made by Flamingo Casino Club and demands that the company immediately stop selling its non-fungible tokens, also known as NFTs.

Virtual Casino Fails to Submit Important Infos

NFTs are blockchain-based digital assets that grant the holder ownership of virtual art, music, or in this example, a metaverse casino. In addition, each NFT possesses unique characteristics that cannot be duplicated, verifying its validity. 

Investigators began examining the casino in March, shortly after it opened for business, and said they were ultimately able to locate its perpetrators in Moscow. In an exclusive interview, the head of the lead agency said that the casino deceived investors with false promises. Virtual concerts, poker tournaments, and tennis courts are among the amenities advertised on the website of the organization. 

The Flamingo Casino Club’s website also said that NFT holders would earn 50% of the casino’s profits as passive income. According to its website, it further tempted customers by providing the possibility to win extravagant prizes such as Teslas and iPhones in its random lotteries. To gain investors’ confidence, the casino actively promoted its association with a well-known gaming business, the Flamingo Las Vegas Hotel & Casino.

Texas Regulator Discovers Bogus Pledge 

 

The order states that a team of state authorities uncovered a Russian conspiracy to mislead investors, which was concealed by flashy graphics, promises of returns, and high-profile backers. According to the injunction, Flamingo Casino Club is “deliberately omitting to disclose its assets, liabilities, revenue, and other pertinent financial information pertinent to its operations and the growth and management of the metaverse casino.” The ruling states that despite the fact that the casino sells securitized NFTs, it failed to give purchasers with basic information such as its physical address, phone number, and proof that its leadership team exists. Moreover, the casino owners began mobilizing Flamingo Casino Club around the time Russia invaded Ukraine, and they later informed investors that a portion of the revenues from their NFT purchases would be donated to Ukrainian victims.

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About Lou De Aguila

Lou Ramon Aguila is a contributor for Golden Casino News. He has a degree in BSBA Legal Management with great interest in high-profile legal cases involving sports personalities. An ultimate sports junkie, he covers just about everything in the sporting world with an emphasis on the NBA, NFL, and MLB. In his past time, Lou loves to read manga, watch anime and critique pro-wrestling matches.