Five U.S. States Order Virtual Casino to Stop Selling NFTs

Regulators in five U.S. states – Texas, Wisconsin, Kentucky, New Jersey, and Alabama – have issued a cease-and-desist order to Flamingo Casino Club, a virtual platform where users can purchase non-fungible tokens (NFTs) and participate in lotteries.

The order, which claims that the virtual casino is connected to Russia, was filed by the Texas State Securities Board on Wednesday.

A High Tech Scam

Stating reasons for filing the order, regulators mentioned that the virtual casino used its website to lure investors  with false promises. 

The order alleged that Flamingo promised to give 50% of its profits to users who purchase NFTs from the platform. The casino also urged users to engage in its organized lotteries to win exorbitant prizes.

The regulators also alleged that the casino claimed to be backed by big legitimate companies such as Flamingo Las Vegas Hotel and Casino, a popular gambling establishment.

However, all of these were false and were merely fabrications that were used to promote the securitized NFTs the casino offered so as to attract investors, the order stated. 

The order further stated that Flamingo failed to provide the public with authentic fundamental information. Hence, there was no way to prove that the people claiming to be behind the platform truly existed.

Overall, the order dubbed the virtual casino a “high tech scam” that regulators are trying to protect the public from so as to prevent immediate and irreparable harm to people.

Regulators Claim Flamingo is Connected to Russia

Following an investigation, law enforcement officials noted that the promises of profits that Flamingo offered investors, as well as the backers it presented to the public, were all schemed by Russia to defraud investors.

The investigators, via the IP address of the desktop and mobile devices connected to the casino, were able to trace the unidentified person(s) behind the platform to Moscow, the capital city of Russia, the order stated.