our government enforcement agencies in the United States have issued instantaneously cease and desist orders to a metaverse casino, claiming that the firm's nonfungible tokens are unregistered securities.
The tokens are said to provide access to the metaverse casino, staking rewards, sales split from its games, lotteries, and native token WATT across two NFT collections provided by metaverse casino Slotie.
Nevertheless, regulators appear dissatisfied with the platform's marketing of the NFTs and its accusation of lack of securities registration.
On Oct. 20, state securities boards in Texas, Kentucky, New Jersey, and Alabama issued orders for Slotie to cease and desist operations, citing the platform's lack of state registration and the offering of unauthorized securities through NFTs.
The agencies also accused the organization, which they believe is based in Georgia, of supplying misleading promotional material and concealing key financial information, among other things.
According to the New Jersey Bureau of Securities' cease and desist order, Slotie is offering securities that are not registered with the Bureau, are not "federally covered," and are not exempt from registration.
It also criticizes the platform for neglecting to disclose all disclosures related to operating a gambling platform, as well as offering wrong info and failing to register as a broker-dealer.
The filing questions explicitly Slotie's claims that its initial batch of 10,000 NFTs sold out in less than five minutes and its second batch of 5,000 NFTs sold out in less than two minutes, noting that there is no "evidence on the blockchain" to back such claims.
Related cease and desist orders were issued earlier this year against Web3 projects Flamingo Casino Club and the Sand Vegas Casino Club.
In May, five US state officials alleged Flamingo Casino Club was a Russian scam operation that reportedly falsified an alliance with a physical casino and lied about purchasing Metaverse land from hip-hop artist Snoop Dogg.
The Securities and Exchange Commission (SEC) of the United States is also investigating whether certain NFTs should be classified as securities.
According to Bloomberg, anonymous sources said in March that the SEC was looking into NFT creators and marketplaces to see if specific nonfungible tokens were being used to raise funds in the same way that traditional securities were.
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