State joins enforcement action over Russian NFT scam in Metaverse

Wisconsin and four other states following the scandal at a digital casino in the Metaverse.

The Wisconsin Department of Financial Institutions, along with financial regulators in four other states, filed enforcement action on Wednesday against a Russian organization for allegedly defrauding US residents with fraudulent investments.

The metaverse refers to the virtual world in which Internet users can interact through avatars to play, shop, and work. The enforcement actions accused Flamingo Casino Club of defrauding individuals through fraudulently selling non-fungible tokens (NFTs) meant to convey ownership of a virtual casino and entitle investors to share in casino profits. When other users play virtual games such as craps, blackjack or roulette. NFTs are digital items in which their ownership is permanently stored on the blockchain – an online public ledger of digital transactions of cryptocurrencies.

In early March, a Russian group began operating fraudulent casinos, advertising a partnership with Flamingo Las Vegas — an actual casino in Nevada — and attracting investors via social media. The group also used anonymous online influencers to persuade people to buy into the scheme, including several YouTube videos that have garnered tens of thousands of views.

Enforcement actions brought by regulators in Alabama, Kentucky, New Jersey, Wisconsin and Texas accused Flamingo Casino Club of “going dark” and missing out on investors’ money.

“While advances in technology create exciting new opportunities for many businesses, scammers are already attempting to capitalize on the hype associated with the metaverse and NFTs,” the regulator said in a statement. “They are developing high-tech tricks to create a mask of legitimacy and deceive victims – while falsely promising lucrative profitability, guaranteed income, financial security and a once-in-a-lifetime opportunity to become a Metaverse millionaire. Playing on emotion. We are uncovering a growing number of suspicious requests for unregistered securities belonging to Metaverse. Today’s action is just the tip of the iceberg.”

Wisconsin, four other states file enforcement action against Russian Metaverse scandal Originally published by Wisconsin Examiner.