Wisconsin DFI warns against alleged Russian-based NFT scam | #socialmedia


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MADISON, Wis. — The Wisconsin Department of Financial Institutions is warning of a scam involving a Russian-based organization.

The organization, Flamingo Casino Club, is selling nonfungible tokens, or NFTs, that they claim to be tied to a digital casino. The DFI and regulators from four other states allege that Flamingo Casino Club is lying about its operations.

In a statement Wednesday, the five regulators said they filed enforcement actions to “proactively stop this type of fraud and protect the public from irreparable harm.” They said scammers are trying to capitalize on the recent public interest in NFTs.

The DFI said the scam is based in the metaverse, a digital space where people can shop, meet up and work. In theory, users can purchase NFTs to unlock certain experiences and even business opportunities in the metaverse. Purchasing a Flamingo Casino Club NFT purportedly gave investors partial ownership of a metaverse casino. Investors would profit when other users played games at the casino.

The organization claimed that it was creating the digital casino in partnership with Flamingo Las Vegas, an actual brick-and-mortar casino located on the famed Las Vegas Strip. The DFI alleges that this partnership never existed. Flamingo Casino Club allegedly claimed to have partnerships with Yahoo and MarketWatch which also never existed.

Rregulators said that in similar scams perpetrators try to hide their true identities so that they can “go dark” when their illegal actions are discovered. They accuse Flamingo Casino Club of using a fake office address and phone number, concealing its actual location, and hiding important information about how its funds are used.

The DFI says Flamingo Casino Club is using social media platforms such as Twitter and Instagram to solicit investors instead of working with legitimate financial professionals. The group is also allegedly using YouTube creators who are not licensed financial advisors to promote their NFT and recruit investors.

“The same rules that apply to investments in the physical world continue to apply to investments in virtual worlds,” regulators said. “Qualifications and experience matter. There are no virtual risks, just real risks of losing real money in a real scam.”

Regulators advised investors to watch out for signs of fraud, and look at all available information before investing in a project.





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