Regulators in three states crack down on NFT gambling
State securities regulators have filed coordinated enforcement actions to stop the sale of NFTs related to metaverse casino gambling by an organization in the country of Georgia.
The actions accuse Slotie NFT of the illegal and fraudulent sale of non-fungible tokens, commonly referred to as NFTs, to raise capital for online and metaverse casinos. The actions were brought by the Alabama Securities Commission, the Kentucky Department of Financial Institutions and the Texas State Securities Board.
The actions accuse Slotie of issuing 10,000 Slotie NFTs that look like stocks and other stocks.
“The Slotie NFTs will purportedly give investors ownership stakes in the casinos and the right to passively share the profits of the casinos,” it said in a joint announcement. “The rarity of each Slotie NFT, but allegedly determines the amount of passive income to be paid to the owner. Slotie NFTs that contain rarer traits reportedly provide more passive income than NFTs that consist of more common traits.”
Slotie has also reportedly issued WATTs, a ERC-721 token on the Ethereum blockchain that allegedly played a key role in the illegal scheme. Pursuant to regulatory actions, Slotie promoted the NFTs by telling investors that each Slotie NFT generates 10 WATT per day. Investors holding 2 Slotie NFTs and 1800 WATTs were reportedly able to mint a new NFT – a process that Slotie referred to as “breeding”.
The new NFTknown as a Slotie Junior NFTs, allegedly doubles the profits paid to owners of Slotie NFTs and gives investors the right to ownership of a plot of land in a metaverse.
State securities regulators alleged that Slotie illegally and fraudulently traded Slotie NFTs and Slotie Junior NFTs. For example, they accused Slotie of concealing its assets and liabilities, its expected use of capital, the identity of partner casinos and key risks associated with metaverse casinos. They also alleged that Slotie violated state registration laws.
State securities regulators said they are warning investors about new investment schemes linked to the metaverse. State securities regulators recently filed enforcement actions to stop similar illegal offerings promoted by Flamingo Casino Club and Sand Vegas Casino Club. These recent enforcement actions also involved organizations illegally raising capital for online and metaverse casinos.
