OpenSea Suspends Trading of Gambling Apes NFTs

After authorities in Texas and Alabama ordered trade to halt because the “Gambling Apes” NFTs from the Sands Vegas Casino Club were categorized as unregistered securities, NFT marketplace OpenSea has suspended trading of the “Gambling Apes” NFTs from the Sands Vegas Casino Club.

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 manager stated that the team “was previously not subject to any registration requirements, and had not been contacted by any governmental organization 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.

Christopher LaVigne, a partner in the litigation and arbitration team of international law firm Withers, said:

“It appears the main issue with the ‘Gambler’ NFTs is that there was an explicit expectation of profit sharing, which appears to run afoul of the SEC’s Howey test,” 

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.

According to data from Etherscan, the NFTs are now listed on LooksRare and are still being traded.

Many of the listed team members haven’t posted in months, and the project’s Twitter profile has been deactivated.

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Patrick

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