The Flamingo casino club was accused of committing a fraud using nonfungible tokens tied to a metaverse casinos. This has been reported by authorities in Alabama, Kentucky and New Jersey as well as Texas.
The Alabama Securities Commission, Kentucky Department of Financial Institutions and New Jersey Bureau of Securities, Texas State Securities Board, Texas State Securities Board, Wisconsin Department of Financial Institutions announced Wednesday that the Flamingo Casino Club had been “fraudulently soliciting NFTs”. It claims these NFTs are linked to the ownership rights of a metaverse casino, giving token holders a portion of any profits. According to the organization, it solicited investors via social media and recruited influencers to sell NFTs for the casino.
Also, the state authorities claimed that the club started operating in Russia in March 2022. They also made a “simply false claim” that it was partnered in Las Vegas with Flamingo LasVegas, a brick-and-mortar casino whose name dates back to 1946. The enforcement actions also accused Flamingo casino Club of “deception, fraud” and claiming partnerships with MarketWatch and Yahoo.
The five state regulators stated that the Flamingo Casino Club was allegedly hiding its Russian connection. They also used a fake address and a phone number that wasn’t in use. This hid its physical location, as well as material information about its principals. Flamingo Casino Club is also accused in hiding important information such as the use of funds, material information regarding its negotiations to purchase land from Snoop Dogg.
BREAKING: Five states have ordered metaverse casino that has alleged Russian ties to stop selling NFTs. Texas State Securities Board claims that a casino’s promise to donate a portion of NFT profits in Ukraine to victims is false. My latest w/@TortorelliPaige + @scottzamost https://t.co/J4P69xUPaX
— Eamon Javers, @EamonJavers
May 11, 2022
CNBC reported Wednesday that the “uses of funds” involved Flamingo Casino Club giving a portion from NFT sales proceeds to war survivors in Ukraine. Texas State Securities Board Enforcement Director Joe Rotunda denied the claim. According to the Texas State Securities Board filing, the organization claimed that the NFTs would allow users to “take part in various drawings or lotteries” for prizes such as Tesla cars, iPhones, and cash.
We felt that a simple apology for yesterday’s problems wasn’t sufficient, so we decided to offer a giveaway to everyone who purchased one of our NFTs. pic.twitter.com/pIfTNwSJpf
— Flamingo casino (@Flamingocasino3)
April 14, 2022
These five authorities were added:
“Investments in virtual worlds are subject to the same rules as investments in the real world. Screen names cannot be used as a substitute for real names. Experience and qualifications are important. There are real risks to your money, but there are no virtual ones.
Related: Chinese bank regulator warns against fraud risk in the metaverse
According to the website, the Flamingo casino Club started minting NFTs in April 12. The site featured artwork that showed the Flamingo Casino Las Vegas Hotel and Casino, and stated that the project was currently in the process to acquire land for the Flamingo Casino Club Casino.