Reports said that a metaverse casino has been hit with simultaneous cease-and-desist orders from four state enforcement bodies across the United States, who have deemed the firm’s nonfungible tokens (NFTs) to be unregistered securities.
It has been reported that over two NFT collections offered by metaverse casino Slotie, the tokens are said to offer access to the metaverse casino, staking rewards, revenue split from its games, lotteries, and native token WATT.
However, the regulators don’t appear pleased with how the platform has marketed the NFTs and its alleged lack of securities registration. On October 20, Texas, Kentucky, New Jersey, and Alabama state securities boards submitted orders for Slotie to cease and desist its operations, citing the platform’s lack of state registration and the offering of unregistered securities via NFTs.
A statement by the Texas State Securities Board read:
“The actions accuse Slotie of issuing 10,000 Slotie NFTs that are similar to stock and other equities. The Slotie NFTs purportedly provide investors with ownership interests in the casinos and the right to passively share in the profits of the casinos.”
The report said that the agencies also accused the organization, which it believes to be based in the country of Georgia, of providing misleading promotional information and concealing key financial info, among other accusations. The cease-and-desist order of the New Jersey Bureau of Securities argues that Slotie is offering securities that are not registered with the Bureau, “federally covered,” nor exempt from registration.
Likewise, it also accuses the platform of failing to provide all of the required disclosures of operating a gambling platform while also providing misleading information and failing to register as a broker-dealer.
In particular, the filing questions Slotie’s claims that its initial collection of 10,000 NFTs sold out in under five minutes, and its second batch of 5,000 NFTs sold out in under two minutes, noting there is no “evidence on the blockchain” to back such claims.
The filing read:
“In connection with the offer, sale, or purchase of securities, Slotie is making materially false and misleading statements and/or omitting to state material facts.”
Thus, the pushback from US state enforcement bodies adds to similar cease-and-desist orders against Web3 gambling projects Flamingo Casino Club and the Sand Vegas Casino Club earlier this year.