Opensea halts trading for Sand Vegas Casino Club NFTs

Opensea, the largest marketplace for non-fungible tokens (NFTs), has halted trading for “Gambling Apes” NFTs. The NFTs belong to the Sand Vegas Casino Club, and their trading was halted after concerns by regulatory bodies.

OpenSea halts trading for Sand Vegas Casino Club NFTs

The NFTs were flagged by regulators in Alabama and Texas because they were classified as unregistered securities. Sand Vegas Casino Club is based in Cyprus, and it has unveiled plans for Gambling Apes NFTs.

The owners of these NFTs had a chance to share in the profits from the casino’s proceeds. BlackyJefferson21, a community lead for this project, has issued a statement on Discord regarding the matter. The statement said that the community was working alongside lawyers, and it had gotten in touch with the states of Texas and Alabama to discuss the next stages.

Another lead for this project said that the team intended to comply with the laws and regulations set in place. Its statement said it “was previously not subject to any registration requirements and had not been contacted by any governmental organization regarding registration requirements.”

The team had predicted that the Gambler NFTs drop would garner proceeds of up to $24,480 and annual revenues of $81,000 from the expensive “Golden Gambler” NFTs.

A legal expert has said that the main issue with the Gambler NFTs is that there was a mention of profit sharing. This makes the assets fall short of passing the Howey test by the Securities and Exchange Commission (SEC).

Christopher LaVigne, a partner in the litigation and arbitration team of Withers, an international law firm, said that if the SEC finds out that an NFT marketplace was providing a trading avenue for securities, it would determine that the marketplace was running similarly to an unlicensed exchange.

Despite the NFTs failing to list on OpenSea, they have been listed on LooksRare, another NFT marketplace, and they are still trading there, according to data from Etherscan. The Twitter profile for the project has been taken down, and most of the listed members of the team have remained inactive on Twitter.

Regulatory framework for NFTs

The regulatory framework for NFTs is still changing similarly to that of cryptocurrencies. China banned cryptocurrencies in mid-2021, but NFTs are still being traded. However, the country has not banned NFTs, but it prohibits the use of NFTs for speculative purposes.

Despite the lack of regulatory clarity, NFTs continue to record an influx in trading volumes. NFTs are currently raking in millions of dollars in revenues each month. Such revenues have come from the increased popularity of the sector.

Besides investing in individual NFT drops, large brands have also launched NFTs to boost fan interaction and increase revenues. For instance, the sports sector has recorded an increasing number of NFT drops as teams and leagues look for ways they can use the NFT Craze to attract fan engagement. The most popular NFT drop in the sports sector is NBA Top Shot.