Late last week, emergency cease-and-desist orders were filed against the online casino Slotie by regulators from four different states.
US authorities claim the owners of Slotie were actively seeking financial backers for an illegal gambling operation in the Metaverse. In this virtual space, users can create their own communities, trade goods, and gamble. Slotie has been accused of defrauding investors by state securities boards in Texas, Kentucky, New Jersey, and Alabama, which have demanded that it immediately cease selling its NFTs to retail investors.
NFTs are a type of digital asset recorded on the blockchain that gives the owner the right to claim virtual assets like works of art, songs, or, in this case, a casino in the metaverse. The order stated that ten million Slotie NFTs were distributed to the general public. According to the decree, Slotie, with headquarters in Georgia, launched its services in October 2021. NFTs “are your ticket into the largest and fastest-growing online casino network on the blockchain,” the website boasts.
The order stated that the metaverse project, which was selling securitized NFTs, had not provided buyers with the necessary information, including the physical address of the company or its founders, a phone number, or an email address. The respondent, it is claimed in the order, also withheld details about its assets, liabilities, revenue, and other financial information related to its operations of the metaverse casinos. Director of the Texas State Securities Board Joe Rotunda said that while the metaverse offers legitimate business opportunities, it can also offer a new forum for fraudsters looking to scam the public.
“The latest metaverse investment products—NFTs that purport to provide passive income—often bear significant undisclosed risks,” he said in a statement. “These risks are often significant, and investing in virtual realities can leave investors virtually broke.”
As a result of the order, Slotie must immediately cease and desist from selling to investors until the security is properly registered. If the founders violate the order, they are subject to a fine of up to $10,000. They also have 31 days to request a hearing on the issue.
Marine Corps Veteran-turned-national-tv-personality Eric Mitchell is a world leading expert in sports media, regularly appearing on the world’s largest outlets from BBC, MSNBC, Fox News, Bloomberg, CNN and more. His signature blend of snark and industry expertise landed him columns at none other than RollingStone, GritDaily, PopWrapped, Disrupt — and most recently — Editor in Chief at NFT Today Magazine. When he’s not making media appearances or running his empire at LifeFlip Media, he can be found entertaining his thousands of loyal followers on social media through his authentic filter-free content.