State regulators in Alabama, Kentucky, New Jersey, and Texas have filed simultaneous enforcement actions to halt the sales of NFTs from the virtual casino Slotie.
Regulators have deemed the activities of Slotie, based in Georgia, “illegal and fraudulent”, as the NFTs offered by the virtual casino are actually unregistered securities issued in violation of US law.
NFTs are blockchain-based digital assets that designate ownership of virtual art, music, or any other items.
According to the order, Slotie has already sold 10,0000 NFTs to the public.
The order also said Slotie failed to provide purchasers with essential information such as the business address of the company or its founders, with a telephone number or an email address.
The order further alleges the respondent failed to disclose its assets, liabilities, revenue, and other financial information related to its operations of the metaverse casinos.
If Slotie does not suspend its activities in these states, they face a fine or imprisonment for a term of 2 to 10 years.
New Jersey Attorney General Matthew Platkin stated: “As interest in digital assets grows, unfortunately so do opportunities for scammers.
“We are vigilantly monitoring the online offerings of new financial products to identify and put a stop to fraudulent schemes targeting investors eager to jump into a hot new market.”
Slotie’s official Twitter account notes that the company is working with its legal team on the situation and hopes to resolve the issue as soon as possible.
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