Texas and Alabama's securities regulators take action against Sand Vegas Casino Club

The blockchain-based cryptocurrency project at Sand Vegas Casino Club has apparently been told to stop selling non-fungible tokens by the securities regulators in the southern American states of Alabama and Texas.

The decrees were issued by the authorities because it was feared that the cryptocurrency service was illegally offering unregistered securities and defrauding the general public under the guise of funding the development of a new online casino, according to a report that was published on Wednesday by the news service Reuters.

Scam suspicion:

According to a filing that was submitted to the Texas State Securities Board, it was stated that the Sand Vegas Casino Club, which is based in Cyprus and was led by its co-founders Finn Ruben Warnke and Martin Schwarzberger, had conducted a "high-tech fraudulent securities offering" in which 11,111 non-fungible tokens were made available to investors. Despite promising buyers that they could each annually pocket up to $81,000 from their stakes in the forthcoming online casino, the regulator purportedly asserted that the figures had also erroneously claimed that these interests were not securities. This assertion was made in spite of the fact that the figures had erroneously claimed that these interests were not securities.

Interdiction issued for the first time:

According to Reuters, these orders to cease and desist are thought to be the first of their kind to be issued by regulators in the United States for a metaverse platform. They also indicate that authorities are eager to clamp down on the market in non-fungible tokens, which are represented by assets such as pieces of digital art. The source went on to explain that two men had been arrested and charged by federal law enforcement bodies the previous month for allegedly defrauding buyers to the tune of approximately $1.1 million thanks to the 'Frosties' project. The source went on to say that the arrests and charges had taken place in the previous month.

Earlier embargo:

According to Reuters, OpenSea, one of the largest marketplaces in the world for non-fungible tokens, told the news agency that it had earlier stopped the purchasing, selling, and transferal of Sand Vegas Casino Club assets due to the fact that these had breached the rules of service for the platform. The company had allegedly disclosed earlier that it intended to launch its online casino in both The Sandbox and Decentraland metaverses, with the expectation that the former service would be operational by the end of October, depending on the challenges posed by regulatory authorities.

a failure of leadership:

According to reports, Joe Rotunda, who serves as the Enforcement Director for the Texas State Securities Board, acknowledged that state acts such as these often attract the interest of federal regulators. Rotunda is employed by the Texas State Securities Board. Even though there has been a recent uptick in investor interest in non-fungible tokens, the United States Securities and Exchange Commission is rumored to have not yet issued any formal guidance regarding the question of whether or not such stakes can be considered securities in certain circumstances.

Reportedly, Rotunda stated to the news service that

"You should stay away from here. We are cooperating with one another across states to investigate the offerings and to arrange appropriate enforcement actions, if necessary.