Metaverse Casino “Slotie” hit with a multi-state cease and desist order

Metaverse Casino Slotie was hit by four emergency cease and desist orders from Texas, New Jersey, Kentucky and Alabama on Thursday for alleged violations of gambling laws.

Slotie uses the internet to attract investors to participate in illicit gambling operations in the Metaverse, a digital world where participants can interact, purchase products, and gamble online. Slotie is currently based in Georgia and began operations in 2021. It touts to investors that its non-fungible tokens (NFTs) are a ticket to “the largest and fastest growing online casino network on the blockchain.”

NFTs are digital assets that feature their own unique virtual art, music, or in Slotie’s case, part of their Metaverse casino. Since its inception, more than 10,000 Slotie NFTs have been sold to the public.

The Slotie website also claims to be the “Las Vegas of the Metaverse” as it is currently hosted by Sandbox, one of the largest Metaverses available. It raised over $10 million in Series A funding from a venture capitalist group in the first quarter. Slotie Junior NFTs, their new project, are unique ERC-721 tokens created exclusively on the Ethereum blockchain.

States accused Slotie of defrauding investors and ordered an immediate halt to selling his NFTs to retail investors. All four states claim slotie owners have encouraged dealers to engage in unlawful gambling.

One of the reasons given in the cease and desist orders is that while their NFTs are securitized, they have not provided investors with essential contact information such as business address, founder names, phone numbers, or email addresses.

The order also alleges that Slotie failed to comply with requests to disclose assets, liabilities, total earnings and other financial information. The order also states that Slotie must stop selling to investors until the security is properly registered in all four states, and risks a fine of up to $10,000 if it violates that order.

Joe Rotunda, director of the Texas State Securities Committee, told CNBC that while the metaverse offers legitimate business opportunities, it “can carry significant undisclosed risks,” which at times “can virtually leave investors broke.”

On Thursday, Slotie appeared to be alluding to the injunctions Twitter.

“Sloties has positioned our community for long-term growth!” read a post at 9:15 am ET. Metaverse Casino “Slotie” hit with a multi-state cease and desist order

Fry Electronics Team

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