Five US States Target Metaverse Casino Project with Russian Ties in Emergency Cease-and-Desist Order

On May 11th, the regulatory bodies in 5 US states filed an emergency cease-and-desist order against one online casino company operating in the Metaverse – a digital platform where customers can not only interact with each order but also purchase certain products and also gamble – due to its alleged links to Russia.

The regulators of Alabama, Kentucky, New Jersey, Texas, and Wisconsin issued the order against the Flamingo Casino Club as the Metaverse gambling platform has concealed some information about itself, including the fact that it offers its services out of Russia. The gambling watchdogs of the five US states mentioned above claim that the project had been traced to Russia where it officially started operation in March 2022.

According to the claims of the state law enforcement officials, the operators of Flamingo Casino Club failed to reveal the company’s ties to Russia. Furthermore, the Metaverse digital platform gambling project has been accused of making a number of false or misleading statements that the company had had an affiliate partnership with the Flamingo Las Vegas Hotel and Casino, which is not true. The claims of the group’s owners that their casino would be built within The Sandbox and their reports of being in negotiations with the American rapper and songwriter Snoop Dogg over a potential purchase of a portion of his virtual land in the Metaverse project also turned out false and misleading.

The company was also found to have falsely claimed that it had donated funds to Ukraine as part of the latter’s ongoing military conflict with Russia.

Flamingo Casino Club Has Allegedly Made False and Misleading Claims to Scheme Customers

The aforementioned civil filing represents a coordinated effort by the five state regulatory bodies to clear out what is actually happening amid the rapid growth of the Metaverse, which has been turned into a favorable territory for criminals linked to alleged fraud, deception, and theft by innovation and speculations.

The 22-page emergency cease-and-desist order not only outlined the allegedly false claims made by Flamingo Casino Club but also required that the company cease the sale of its non-fungible tokens (NFTs) with immediate effect, with the offering being described as a “high-tech scam” by the five state regulatory bodies. As mentioned above, the order alleged that the Metaverse digital casino project intentionally failed to disclose its assets, revenue, liabilities, and other financial information relevant to its operations, such as phone numbers, physical addresses, and identifying information of its key executives to prove they actually existed.

The website of Flamingo Casino Club listed various events, including poker tournaments, tennis matches, and virtual concerts, along with claims that NFT holders would receive half of the profits generated from the casino as passive income. Random lotteries promising high-value prizes were also listed on the website. However, according to the emergency order, it all turned out to be a scheme to defraud potential investors.

The investigation started in March, not long after the project started operation, and was eventually able to unveil the organization’s location in Russia by tracking some IP addresses. For the time being, Russia and Russian companies are still subject to heavy international sanctions because of the country’s unprovoked invasion of Ukraine that started on February 24th, 2022.

Now, the Flamingo Casino Club was given 31 days to comply with the regulators. If it does not, the project’s team could face an imprisonment sentence of up to 10 years if the five states decide to take them to court, with the Metaverse project’s founders potentially facing extradition to the US and facing a trial.