Problem in the metaverse, as a fraudulent casino gives false promises.
- Five U.S. states are simultaneously filing a restraining order against Flamingo Casino Club, a metaverse virtual casino.
- The scam included false promises of NFT gifts, horse racing and lotteries.
On Wednesday, Texas, Wisconsin, Kentucky, New Jersey and Alabama filed an emergency order against the virtual Flamingo Casino Club. The 22-page order filed a fraud complaint against the site, which proclaimed itself to be a leading virtual casino. This order revealed the fact that the club’s website omitted key information such as address, location and qualifications.
Flamingo Casino Club also claimed to be affiliated with Flamingo Las Vegas hotel and casino, which turned out to be false. It touted features like poker tournaments, tennis courts and virtual concerts. Even telling its NFT holders that they would receive passive income of up to 50% of the profits generated by the casino.
Regulators to the rescue
The scam was originally discovered by Joe Rotunda, who sits on the Texas State Securities Board as director of enforcement. While scanning pages in the meta verse, he came across Flamingo Casino Club. As they began to dig deeper, the site was eventually traced back to Russia. During the discovery phase, they realized that the IP addresses could be traced back to Moscow, which ultimately revealed the scam of deceiving investors.
Although we love the decentralized world, which is Metaverset, it brings the need for regulation into play. It was Rotunda and the subsequent team of investors who not only were able to detect the scam, but also began to intervene against it, ordering them to immediately suspend NFT sales.
Mistakes and all that, the meta-verse is becoming more and more relevant in our world. You may be wondering how to avoid scams such as “Flamingo Casino Club”. One way to do this is to do your due diligence before investing money. Often scammers want you to click on a link to receive land or non-fungible tokens, do not blindly follow these instructions. It is important to do research to know that the company is legitimate and backed by credible sources.
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