The Texas Securities Commission has issued an immediate cease and desist order against a fraudulent metaverse investment scheme.
The Texas Securities Commission has accused Sand Vegas Casino Club, Martin Schwarzberger, and Finn Ruben Warnke of illegally distributing non-fungible tokens (NFTs) to construct virtual casinos in metaverse venues such as Sandbox, Decentraland, Infinity Void, and NFT Worlds. A cease and desist order was also filed by the Alabama Securities Commission.
The order’s signatories have informed its followers that their Gambler NFTs and Golden Gambler NFTs are not regulated as securities, and that securities regulations do not apply to NFTs. The Texas Securities Commission is of the opinion that this is not the case.
The Securities and Exchange Commission believes that the 11,111 Gambler NFTs are a fraudulent securities sale. Those who buy the tokens get a cut of the earnings made by the metaverse casinos they support, which turn into sites where avatars may play casino games like poker with cryptocurrencies.
According to the order, those named in the cease and desist reportedly promoted the tokens as a way for investors to make money. They claimed that, among other things, holders would get between $102 and $2,040 per NFT per month. Other marketing methods allegedly used by the group include targeting social media influencers, webcasts, AMAs, airdrops, and virtual lotteries on social media with prizes such as Apple items and a Tesla car, according to the Commission.
The Texas Securities Commission stated, “The respondents are not registered to sell securities in Texas, and the Gambler NFTs and Golden Gambler NFTs are not registered or permitted for sale in Texas.”
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