NFTs from Gambling Apes promised a portion of the earnings from casinos created on metaverse and Web 2 platforms.
NFT marketplace OpenSea has suspended trading of the "Gambling Apes" NFTs from the Sands Vegas Casino Club following the authorities in Texas and Alabama order to halt because the Gambling Apes NFTs from the Sands Vegas Casino Club were categorized as unregistered securities.
Holders of the Gambling Apes NFTs can share in the profits of the casinos, according to the Cyprus-based Sand Vegas Casino Club.
BlackyJefferson21, a project community lead, claimed on Discord that the team is working with lawyers and has reached out to Texas and Alabama in "good faith" to negotiate the next steps.
Another administrator stated that the team "was previously not subject to any registration obligations, and had not been contacted by any governmental entity regarding registration requirements," but that the team "intends to comply with all laws and regulations."
The researchers estimated that the "Gambler" NFTs may bring in up to $24,480 per year, while the higher-end "Golden Gambler" NFTs might bring in up to $81,000 per year.
"The fundamental issue with the 'Gambler' NFTs appears to be that there was an explicit expectation of profit sharing, which looks to violate the SEC's Howey test," said Christopher LaVigne, a partner in Withers' litigation and arbitration team.
If the SEC concludes that an NFT marketplace is offering a trading platform for securities, it will very probably consider the marketplace to be functioning as an unregistered exchange, according to LaVinge.