Metaverse casino Slotie has been hit with an emergency cease-and-desist order after being accused of selling illegal NFTs to bankroll its casino activities. Officials in four states allege that Slotie’s owners have been soliciting investors to take part in what they say is an illegal gambling operation. State securities boards in Texas, Kentucky, New Jersey and Alabama ordered Slotie to immediately halt the sale of NFTs to retail customers.
Slotie is a virtual casino based in Georgia—the country not the US state—that began operation in October 2021. It was selling securitised NFTs but failed to inform customers of crucial business information such as addresses, phone numbers, and email addresses.
In a breach of state laws Slotie also failed to disclose its assets, liabilities, and revenue related to its casino operations.
Joe Rotunda, the Texas state securities board director, said in a statement: “The latest metaverse investment products — NFTs that purport to provide passive income — often bear significant undisclosed risks. These risks are often significant, and investing in virtual realities can leave investors virtually broke.”
Slotie had 30 days to request a hearing on the matter but appears to have declined.
NFTs and cryptocurrency are both experiencing tough times right now. There may be a recovery in good time but, as Elon Musk recently tweeted, it’s going to be a long winter.
This is also the third such case in the United States this year. In April, Texas and Alabama ordered virtual casino Sand Vegas Casino Club to stop selling NFTs. In May, Texas, New Jersey, Kentucky, Wisconsin, and Alabama slapped US metaverse casino Flamingo Casino Club with a cease-and-desist.