Five US states have banned Russian casinos in the metaverse
Law enforcement authorities reported that people from Moscow are behind the Flamingo Casino Club project
12.05.2022 - 12:15 Vasiliy Smirnov
What’s new? Five US states (Texas, Wisconsin, Kentucky, New Jersey, and Alabama) simultaneously filed cease-and-desist orders against Flamingo Casino Club, a virtual casino that operates in The Sandbox metaverse. According to a law enforcement investigation, the project is linked to Russia and managed directly from Moscow, CNBC reports. The states also demand a halt to the issuance of casino-related non-fungible tokens (NFTs).
What is known about virtual casino? Joe Rotunda, director of enforcement at the Texas State Securities Board, said that Flamingo Casino Club lured investors with false promises. The virtual casino website says there will be virtual concerts, poker tournaments, and tennis courts for members. For NFT holders, they promise passive income that will be paid out of a portion of the profits.
According to the order, Flamingo Casino Club “intentionally failing to disclose its assets, liabilities, revenue and other financial information germane to its operations and the development and management of the metaverse casino.” The document also said that while the project sells securitized NFTs, it does not provide factual information about its location and managers. The government stated that Flamingo Casino Club failed to disclose any connection to Russia and falsely declares cooperation with legal companies. Thus, the project reported its affiliation with the Flamingo Las Vegas Hotel and Casino in order to attract investors.
What happened before? The founder and CEO of Mining Capital Coin (MCC) Luiz Capuci Jr. was accused of fraud for $62 million. According to the US Department of Justice, he misled investors about his cryptocurrency mining project.
Also, the US Securities and Exchange Commission (SEC) will increase its staff to combat crypto fraud. The agency will hire 20 investigators and litigators for its Crypto Assets and Cyber Unit.
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