Quick take:
- Texas, Kentucky, New Jersey and Alabama states have asked Slotie to halt selling NFTs.
- The metaverse casino was hit with a cease-and-desist order after failing to provide a physical address and phone number.
- The virtual platform was also accused of failing to provide evidence that legitimises its promise of profits to NFT holders.
Slotie has been issued with a cease-and-desist order from four U.S. states. The metaverse Casino has been asked to halt selling non-fungible tokens (NFTs) by Texas, Kentucky, New Jersey and Alabama markets authorities.
The metaverse is described as a 3D virtual space where people can interact in 3D avatars through various experiential activities like gaming and live concerts. In Slotie’s case, holders of its NFTs gain ownership of the virtual entity, allowing them to participate in immersive gambling activities.
The platform has been accused of failing to provide proof of physical address and phone number. The four states also want Slotie to provide evidence of profits promised to NFT holders.
An NFT is a blockchain-based digital file that provides proof of ownership of a collectible, artwork, or JPEG. Slotie NFT holders give them ownership of the virtual metaverse platform. According to a joint statement by the four states, Slotie was soliciting users to participate in illegal gambling in the metaverse. The company issued 10,000 NFTs to the public, the order states.
The platform began operations in October 2021 in Georgia state and claims to provide holders of its NFTs with access to “the largest and fastest-growing online casino network on the blockchain.”
Although Slotie’s NFTs are securitised, the platform failed to provide a verifiable business address and the names of the project founders accompanied by their telephone numbers and email addresses.
According to the order, Slotie also failed to provide important information related to its assets and liabilities, as well as, revenue and other financial information.
Joe Rotunda, the Texas state securities board director, while acknowledging the economic opportunities the metaverse provides, warned that it has become a target of 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.”
Slotie has been given a 31 days window to request a hearing on the issue. Violating the order will be subject to a fine of up to $10,000.
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