A metaverse casino was hit on Thursday with a multistate emergency cease-and-desist order.
Among the violations alleged in the order are that the virtual casino failed to provide a physical address, phone number and evidence to legitimize its promises of profits to NFT holders.
NFTs are blockchain-based digital assets that designate ownership of virtual art, music, or in this case, proprietorship of a metaverse casino to the holder of the NFT.
According to the order, 10,0000 Slotie NFTs were sold to the public.
Slotie, which is based in the country of Georgia, began operating in October 2021, according to the order.
On its website, it said its NFTs “are your ticket into the largest and fastest-growing online casino network on the blockchain.”
Although the metaverse project was selling securitized NFTs, the order said it 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.
Joe Rotunda, the Texas state securities board director, said while the metaverse does provide legitimate business opportunities, it also can provide a new forum for fraudsters looking to scam the public.
“The latest metaverse investment products — NFTs that purport to provide passive income — often bear significant undisclosed risks,” he said in a statement.