The regulators in five US states issued emergency orders requiring a metaverse casino with suspected Russian ties to immediately stop selling its NFTs, claiming fraud, deception, and registration violations.
A 22-page emergency cease-and-desist order was filed against the Flamingo casino club by state securities boards in Texas, Wisconsin, Kentucky, New Jersey, and Alabama.
The Flamingo Casino Club’s operators used a false office address, provided a telephone number that is not in service, concealed its actual physical location and hidden material about its principals, according to the regulators.
Through a series of investigations, regulators learned that Flamingo Casino Club’s mobile and desktop IP addresses were tracked back to Moscow.
The order stated that Flamingo Casino Club “intentionally doesn’t disclose its assets and liabilities or other financial information related to its operations and development and management of metaverse casino.”
The erroneous connections do not end there. The club even stated MarketWatch and Yahoo! are both affiliated with them. According to the order, there is no indication that these entities are connected.
In a promotional film, Flamingo Casino Club unveiled plans to develop a virtual casino on The Sandbox metaverse platform. However, it has not yet been constructed.
The casino fails to disclose the progress of negotiations to purchase virtual land. The expected or projected cost of purchasing virtual land is similarly hidden on the site. It also makes baseless claims about connections with rapper Snoop Dogg and The Sandbox.
The club’s securitized NFTs were supposed to give would-be investors part ownership of the casino, a part of the profits, and the chance to win Teslas, iPhones, etc.
Potential investors were also tempted by what officials believe were false claims of affiliation with the Flamingo Las Vegas Hotel and Casino, a legit casino that has no affiliation or partnership with the Flamingo Casino Club, according to regulators.
The five states’ concerted effort demonstrates what can be accomplished when authorities come together to tackle crypto related scams. Just in March, the U.S. DOJ charged Ethan Nguyen and Andre Llacuna for defrauding investors of over $1 million by running a rug pull scam through the NFT project.
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