Trading of “Gambling Apes” non-fungible tokens from the Sand Vegas Casino Club has been suspended by OpenSea after authorities in Texas and Alabama requested a halt to trade because they were categorized as unregistered securities.
Holders of the Gambling Apes NFTs will be able to share revenues from the casinos, according to the Cyprus-based Sand Vegas Casino Club.
The project’s community lead, BlackyJefferson21, said the team is working with lawyers and has gone out to Texas and Alabama in “good faith” to discuss the next steps in a discord post.
Another administrator said that the team wanted to obey all laws and regulations, but that it “had never been contacted by any governmental organization concerning registration requirements” and that it “was previously not subject to any registration duties.”
The “Gambler” NFTs might make up to $24,480 per year, while the higher-end “Golden Gambler” NFTs could earn up to $81,000 per year, according to the team.
“It seems that the primary problem with the ‘Gambler’ NFTs is that there was an express expectation of profit sharing,” said Christopher LaVigne, a partner in international law firm Withers’ litigation and arbitration division.
According to LaVigne, if the SEC determines that an NFT marketplace provides a trading platform for securities, the marketplace will almost certainly be considered an unregistered exchange. OpenSea has not replied to a request for comment by the time CoinDesk went to press.
The NFTs are presently listed at LooksRare and are still traded, according to Etherscan data. The project’s Twitter account has been removed, and some of the listed team members haven’t updated their status in months.