After the invasion of Ukraine, Russia’s access to global financial markets became increasingly restricted. The latest attempt to prevent the country from evading sanctions came from regulators in five US states. At the same time, they filed an order to ban the Metaverse casino, which has alleged ties to Russia, from selling non-fungible (NFT) tokens.
According to reports, regulators in Texas, Wisconsin, Kentucky, New Jersey and Alabama have ordered the Flamingo Casino Club to cease operations. These orders came after the casino failed to disclose its relations with Russia. Also, many claims about legitimate business are believed to be false.
Civil suits represent a new and coordinated effort by US states to contain the explosive spread of the metaverse industry. In particular, they intend to tame innovation and speculation, providing a powerful terrain for criminals to engage in fraud, theft and deception.
The regulators have collectively filed a 22-page cease and desist order alleging the Flamingo Casino Club’s allegations are false. Pursuant to the order, the company intentionally failed to disclose its assets, liabilities, income and other financial information. It also refused to disclose information about the development and its management.
In addition, the NFTs offered by Flamingo Casino Club are actually said to be securitized securities regulated in the United States. However, the buyers did not receive the necessary information about it, including the seller’s address and phone number. Furthermore, the casino has not provided any evidence of their team’s existence.
Investigators checked the casino in March
Investigators reportedly began investigating the activities of the Flamingo Casino Club in March. During the investigation, it was discovered that the casino operators were in Moscow after checking the IP addresses.
In an interview, the main authority’s senior official said that the casino had lured optimistic investors with false promises. For example, the site claimed that the casino will offer 50% of the winnings as passive income with NFTs. Based on this information, the request states that the offer is a high-tech scam.
In addition, the casino has attracted investors with the potential to win big prizes including Tesla cars, iPhones, and lottery prizes. The casino site has also included features such as virtual concerts, poker tournaments, and tennis courts.
The site also mentions that the Metaverse project is collaborating with the Flamingo Las Vegas Hotel and Casino, a popular gambling establishment in Las Vegas. In this way they may want to attract investors. The company also claimed that its virtual casino will be built on the Metaverse blockchain, The Sandbox.
However, no progress has been reported so far. Casino officials said they have delayed the purchase of the virtual land due to ongoing negotiations with rapper Snoop Dogg, who already owns land in the Metaverse. Also, the casino has reportedly not disclosed the status of its talks with Snoop Dogg, nor the estimated cost of purchasing the virtual land.
Flamingo Casino Club failed to provide basic information
Joe Rotunda, executive director of the Texas Securities Commission, commented on the news:
“It’s about digital assets and anonymous people hiding their whereabouts,” Rotunda said. “Once the money is sent, we may not be able to get it back. It disappears into a black hole on the blockchain and people can lose everything.”
Rotunda added that the casino began developing the casino project right after Russia invaded Ukraine. He further noted that the casino promised to donate a portion of the profits from NFT sales to Ukrainians. But since that pledge, she hasn’t donated a penny.