Four state enforcement agencies throughout the United States have issued cease and desist orders to a metaverse casino because they believe the company’s nonfungible tokens (NFTs) are unregistered securities.
The metaverse casino Slotie is claimed to be offering two NFT collections in exchange for the tokens, which are reported to provide access to the casino, staking incentives, revenue splits from its games, lotteries, and native token WATT.
This has not evade the regulators’ watchful eyes, unimpressed with the platform’s promotion of NFTs or its supposed lack of securities registration. State securities authorities from Texas, Kentucky, New Jersey, and Alabama demanded that Slotie cease and desist operations on October 20.
“Slotie is accused in the conduct of issuing 10,000 NFTs that resemble stocks and other commodities”, according to a statement released by the Texas State Securities Board on October 20. “The Slotie NFTs allegedly give investors ownership rights in the casinos and the opportunity to share in the earnings of the casinos passively”.
According to the Texas State Securities Board, Slotie is accused 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.”
In addition to other charges, the authorities said that the company gave false information about its products and finances.
The New Jersey Bureau of Securities’ cease and desist order states that Slotie is marketing securities that are neither covered by federal, registered with the Bureau, nor excused from registration.
It also charges the platform with supplying false information, operating a gambling platform without complying with the necessary disclosures, and not having registered as a broker-dealer.
There is no proof on the blockchain to corroborate Slotie’s assertions that its first batch of 10,000 NFTs sold out within five minutes and its next batch of 5,000 NFTs sold out in less than two minutes, according to the filing.
Joe Rotunda, the director of the Texas State Securities Board, issued a warning against metaverse-linked NFTs. He said that NFTs that claim to deliver passive income frequently carry major unknown risks.
