Alabama and Texas securities regulators have issued a stop order to a casino club, Sand Vegas, based in Cyprus, that had been operating illegally for some time before being shut down. The company has been tasked with putting an end to a false investment plan that is related to the metaverse.
Casino Club Issue Unregistered NFTs
The Texas State Securities Board announced on the 13th of April that it has issued a directive accusing Martin Schwarzberger, Finn Warnke, and Sand Vegas Casino Club of issuing NFTs to fund the development of digital worlds and digital casinos in violation of state securities laws. According to the allegations, Sand Vegas issued 11,111 Non-Fungible Tokens on its behalf in order to gather cash for the company’s metaverse-based casinos.
The platform gave people who purchased Gambler and Golden Gambler NFTs a certain percentage of the future casino’s winnings as a thank you for their purchase. On April 9th, the trading price of the Gambler NFTs fluctuated between 0.23 ETH (almost $744.39) to 777.777 ETH (nearly $2.5M), and the price of the the Golden Gambler ranged between 2.13 ETH (about $6,783) and 168 ETH (up to $547,000). According to Sand vegas’ forecasts, owners of Gambler NFTs might earn returns ranging from $1,324 to $24,490 on each NFT within the same period.
Texas Authorities Denies Sand Vegas License To sell NFTs
According to the instruction, the holders argued that their Non-Fungible Tokens (NFT) did not have the status of securities and, as a result, could not be evaluated for inclusion under the securities legislation. According to the document, those with the NFTs are also putting out an effort to thwart any efforts to bring about the regulation of Gambler as well as Golden Gambler Non-Fungible Tokens.
The report went on to argue that the respondents are misleading the customers by highlighting that they may readily circumvent securities legislation via the adoption of ambiguity-generating alternatives or the use of various strategies. Since the Sand Vegas facility has not been granted a license to trade securities throughout Texas and Alabama, and it has been denied authorization to go on with the NFT sales.
As of right now, it appears that the initiative made on behalf of the authorities in Texas may pave the way for a global trend in the near future. In an interview with journalists, Joe Rotunda, the Director at the TSSB (Texas State Securities Board), stated that his company is doing everything it can to evaluate analogous digital assets and NFTs and develop a strategy for enforcement procedures in the NFT space. All institutions planning to venture into the Metaverse and world of NFTs should procure licenses from necessary authorities before doing so.