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Wisconsin, four other states, file enforcement actions against Russian metaverse scam

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Wisconsin, four other states, file enforcement actions against Russian metaverse scam

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The Wisconsin Department of Financial Institutions, along with financial regulators in four other states, simultaneously filed enforcement actions against a Russian organization on Wednesday for allegedly scamming American residents with fraudulent investments in the metaverse. 

The metaverse refers to virtual worlds in which internet users can interact through avatars to play, shop and work. The enforcement actions accuse Flamingo Casino Club of scamming people through fraudulently selling non-fungible tokens (NFTs) that purport to convey ownership of a virtual casino and give investors a right to share in the profits of the casino 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 — which is an online public ledger of digital transactions of cryptocurrencies. 

Beginning in March, a Russian group started operating the fraudulent casino, advertising a partnership with Flamingo Las Vegas — a real casino in Nevada — and attracting investors through social media. The group also used anonymous online influencers to convince people to buy into the scheme, including through several YouTube videos that have gained tens of thousands of views. 

The enforcement actions, brought by regulators in Alabama, Kentucky, New Jersey, Wisconsin and Texas, accuse the Flamingo Casino Club of “going dark” and disappearing with the…

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