Multistate Order for Defrauding Issued Against Metaverse Casino

Regulators of five US states have filed a 22-page emergency cease-and-desist order against a metaverse casino of scam and ties with Russia. The law case was filed on Wednesday as the main charge was fraud using non-fungible tokens (NFTs).

The five prosecutors are the Texas State Securities Board, New Jersey Bureau of Securities, Kentucky Department of Financial Institutions, Alabama Security Commission, and Wisconsin Department of Financial Institution.

The Press Release issued by the prosecutors mentioned that the casino claims NFTs tied to ownership rights as the website invites users to play virtual concerts, blackjack, roulette, poker tournaments, along with other common casino games with an avatar that they create.

Additionally, the Texas State Securities Board’s Director of Enforcement stated that the casino’s pledge to donate a portion of NFT profits to Ukraine war victims is false.

The NFT holders were deceptively promised 50% of the profits generated from the casino as passive income. It also entices users by offering an opportunity to win exorbitant prizes like iPhones and Teslas through its randomized lotteries.

Flamingo Casino Club persuaded the solicited investors through social media by recruiting influencers to promote NFT sales of the casino. These NFTs were then marketed to investors through the company’s website and social media accounts instead of financial professionals.

Prosecutors have also accused the club of making false claims to be partnered with Flamingo Las Vegas, a brick and mortar casino whose namesake has been operating in L.V since 1946.

Investors began scrutinizing the casino shortly after it began operating in March 2022 and assert they were able to trace the people behind it to Moscow, Russia. The enforcement actions also accused the club of ‘deception and fraud’ for claiming a partnership with MarketWatch and Yahoo.