On Wednesday, Securities regulators in the US states of Texas and Alabama ordered an online casino developing firm to stop selling non-fungible tokens (NFTs).
As per reports, the regulators have accused the The Cyprus-based firm, Sand Vegas Casino Club of illegally granting unregistered securities and thus, duping the public.
The company and its co-founders Martin Schwarzberger and Finn Ruben Warnke are accused of offering 11,111 NFTs in a “high-tech fraudulent securities offering”.
The offering was made to raise funds to develop virtual casinos in the metaverse. The Texas State Securities Board stated that the accused also incorrectly told potential customers that the tokens were not securities.
Sand Vegas guaranteed buyers of its Gambler and Golden Gambler NFTs that they would get a share in virtual casino profits. They even predicted proceeds of as much as $81,000 each year for that matter.
After the case was brought to notice, OpenSea, the NFT marketplace, stopped the selling, transferring, and buying of Sand Vegas tokens for they have violated the terms and services of the platform.
U.S. authorities seeking to clamp down on illegal crypto related activities mostly resort to the cease-and-desist order.
Citing similar risks of illegal financial activities associated with NFTs, Chinese regulators, too emphasised on “resolutely curbing” NFTs’ speculative behaviour in financial products and securitization.