5 state regulators allege organization is tied to Russia, scamming users using metaverse casino

METAVERSE

“The same rules that apply to investments in the physical world continue to apply to investments in virtual worlds,” said the regulators.

Experts in Alabama, Kentucky, New Jersey, Texas, and Wisconsin have recorded mandatory activities against the Flamingo Casino Club for allegedly executing a trick using nonfungible tokens (NFTs) linked to a metaverse club.

In a Wednesday declaration, the Alabama Securities Commission, Kentucky Department of Financial Institutions, New Jersey Bureau of Securities, Texas State Securities Board and Wisconsin Department of Financial Institutions claimed the Flamingo Casino Club has been “fraudulently soliciting NFTs”

It claims are linked to the possession freedoms of a club in the metaverse, giving token holders a percentage of any benefits. The organization allegedly solicited financial donors directly through internet entertainment, picking powerhouses to pursue NFT negotiations for the club.

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The state experts also confirmed that the club began operations in Russia in March 2022 and offered a “completely fake” promise that it was collaborated with the Flamingo Las Vegas, a genuine club whose name dates back to 1946. Furthermore, the Flamingo Casino Club was accused of “trickery and extortion” for claiming affiliations with Yahoo and MarketWatch.

“Not only is it allegedly concealing its connection to Russia, but the Flamingo Casino Club is also allegedly using a phony office address, providing a telephone number that is not in service, concealing its actual physical location and hiding material information about its principals,” said the five state regulators. “Flamingo Casino Club is also accused of concealing other important information, such as its use of funds and material information about its negotiations for the purchase of land — which it claims to be buying from Snoop Dogg.”

CNBC reported on Wednesday that the “utilization of assets” included the Flamingo Casino Club donating a portion of the proceeds from NFT transactions to Ukrainian war victims, a claim Texas State Securities Board regulatory chief Joe Rotunda dismissed. According to a recording from the Texas State Securities Board, the organization allegedly stated that the NFTs would allow clients “the ability to participate in various drawings and lotteries” at prices such as Tesla autos, iPhones, and cash.

The five authorities added:

“The same rules that apply to investments in the physical world continue to apply to investments in virtual worlds. Screen names are not a substitute for real names. Qualifications and experience matter. There are no virtual risks, just real risks of losing real money in a real scam.

 

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