Metaverse Casino NFTs Blocked For Offering Unregistered Securities

Securities regulators in Alabama and Texas and Alabama have blocked the sales of “Metaverse” casino non-fungible token (NFT) from Sand Vegas Casino Club. According to the regulators, the Cyprus-based online firm was offering unregistered securities and defrauded the public.

The Firm’s Its Co-Founders Were Allegedly Offering Fraudulent Securities

Sand Vegas and its co-founders Finn Ruben Warnke and Martin Schwarzberger made a “high-tech fraudulent securities offering” of 11,111 NFTs to raise funds for virtual casinos in the metaverse. The report also revealed that the firm deceived buyers that the tokens were not securities, which can be classified as a fraudulent act.

Additionally, the regulators said Sand Vegas erroneously told buyers of its Gambler and Golden Gambler NFTs that they will be given a share of the casino profits. To spur their interests, the firm made a lofty profit forecast of as high as $81,000 yearly.

This is evidence that the NFT space is gradually being infested with fraudsters and opportunists looking to reap fraudulent gains from the growing sector. Last month, two men were convicted for allegedly deceiving NFT buyers, scamming them of $1.1 million in the process.

The Sand Vegas tokens are listed on the NFT marketplace OpenSea. It’s not clear how much the marketplace knows about the situation, but it has not responded to requests for comment, as of the time of writing.

The Regulators Have Planned Enforcement Actions In the NFT Space

Last week, OpenSEa collaborated with MoonPlay to allow direct credit card payment for NFT offerings. This will open the doors and give investors that do not own cryptocurrency the right to participate in the market.

The partnership allowed people that want to buy, trade, or sell NFTs to pay directly with different options like Google Pay, Apple Pay, as well as debit cards.

Enforcement director at the Texas State Securities Board, Joe Rotunda, stated that there are lots of securities offerings in the metaverse, which confirms that the NFT and metaverse space is receiving lots of attention at the moment.

“We are coordinating among states to investigate the offerings and plan enforcement actions if necessary,” Rotunda stated.