Four state regulators have banded together to condemn the sale of Metaverse casinos. NFTs Anything that violates the Securities and Exchange Law.
On Thursday, state securities regulators in Texas, New Jersey, Kentucky and Alabama named Slotie NFT, a virtual gambling entity based in Tbilisi, Georgia, as the “largest and fastest growing online I have filed an emergency cease and desist order with the “Casino Network” for sale. on the blockchain. ”
Slotie, which operates gambling games in over 150 virtual casinos, sells the ability to passively share Slotie’s gambling profits with NFTs that claim to give owners ownership of those casinos. Slotie issued his 10,000 NFTs are distinguished by rarity. The rarer the Slotie NFT, the greater the share of casino revenues to which its owner is supposedly entitled. This is one of many of his NFT projects on the market today, offering similar service and revenue-sharing rewards to owners.
State regulators have determined that NFTs are unregistered securities issued in violation of state law.they have Ordered Slotie to stop From immediately selling NFTs in the four states where we have submitted orders.
Slotie has 30 days to comply with the order. Otherwise, if the operator is prosecuted and convicted, he risks from two years to ten years in prison in addition to the fine.
State securities regulators @SlotieNft! Claim to be involved in fraud by selling securitized products #nftsProjects can face imprisonment from two to ten years and fines for non-compliance. pic.twitter.com/qypcwJeqyA
— OKHotshot (@NFThirder) October 21, 2022
Meanwhile, the gambling company has not publicly acknowledged the accusations, and today doubled down on Twitter about its alleged illegal activities.
More than utility, what makes Sloties special is the belief of the team and community 💪
We are all on our way to great success. everyone 🎰
— Slotty (@SlotieNft) October 21, 2022
The action comes at a time when tensions surrounding American regulatory attitudes toward NFTs appear to have reached an all-time high. I’ve kept my mouth shut. Indicates that it may change soon.
NFT attorney Jeremy Goldman said: Decryption He thinks it makes perfect sense that an NFT project like Slotie would be one of the first to suffer the ire of securities regulators.
“This is an easy achievement,” says Goldman. “[Slotie NFTs] Marketed as giving holders passive income generated by the efforts of Slotties and its partners, this is the definition of a security. ”
Goldman said one of the reasons these states have chosen to pursue Slotie for securities violations is that the case involves gambling, which is highly regulated and closely monitored by state law enforcement agencies. is the fact that
“I think part of the reason it came from the states is because they started with concerns about gambling,” Goldman said. I think they figured the angle would be an easier shot.”
It remains to be seen what impact this state-level action against online casinos will have on the broader debate about federal-level regulation of prime multi-billion dollar NFT collections.
early this month, An anonymous source said bloomberg The Securities and Exchange Commission (SEC) is investigating whether Yuga Labs, the $4 billion company behind the famous NFT collection Bored Ape Yacht Club, violated securities laws in promoting and selling NFTs doing.
Some experts say the move made headlines and was a play on the part of the SEC to prevent other government agencies, including the Commodity Futures Trading Commission (CFTC), from flagging NFT regulatory turf. I thought there was a possibility.
Goldman sees the biggest developments from this week’s enforcement action against Slotie as indicating that even more dogs may be joining the fight than previously expected.
“Federal agencies aren’t the only sheriff in town,” Goldman said. “We can only speculate, but it feels like they are fighting for power and control.