Four state enforcement bodies across the U.S. have issued cease and desist orders to a metaverse casino as they deem the firm’s NFTs to be unregistered securities.
Slotie’s offers over two NFT collections. The tokens offer access to the metaverse casino, staking rewards, revenue split from its games, lotteries, and native token WATT. But the regulators are not pleased with the way the casino has marketed the non-fungible tokens and its lack of securities registration.
The Texas, Kentucky, Alabama, and New Jersey state securities boards on October 20 submitted orders for Slotie to cease and desist operations. It said the firm’s lack of state registration and the offering of unregistered securities through NFTs. The Texas State Securities Board said Slotie allegedly issued 10,000 Slotie NFTs that are similar to stock and other equities. The NFTs provide investors with ownership interests in the casinos and the right to passively share in the profits of the casinos.
Slotie is also accused of providing misleading promotional information and concealing key financial info. The New Jersey Bureau of Securities says Slotie offered securities that are not registered with the Bureau, federally covered, nor exempt from registration. The platform did not provide the required disclosures of operating a gambling platform and provided misleading information and failed to register as a broker-dealer. It also questions Slotie’s claims that its initial collection of 10,000 NFTs sold out in under five minutes, and the second batch of 5,000 NFTs sold out in under two minutes – no evidence on the blockchain to back the claims.
Joe Rotunda, the Texas state securities board director, said NFTs that purport to provide passive income often bear significant undisclosed risks. He outlined the risks are often significant, and investing in virtual realities can leave the investors virtually broke.