After China cracked down on domestic cryptocurrency trading and mining, the central government is now turning its attention to fraudulent projects in the Metaverse.
Accordingly, the Chinese banking regulator has issued a recent alert warning the public about crypto scam projects in the Metaverse. The authority emphasizes that the current hype surrounding the Metaverse makes the virtual crypto world an attractive playground for fraudsters of all kinds.
Banking supervisors specifically identify three common forms of fraud in this regard:
1.) The most common form are fraud projects that advertise the use of innovative technologies such as artificial intelligence (AI) and virtual reality (VR). Against the background of the future potential of these technologies, these projects lure with particularly high returns before the scammers make off with their investors' money.
2.) The second most common form of fraud in the Metaverse are the so-called Play-to-Earn (P2E) projects, which promise that simply playing video games can bring profit in the Metaverse through blockchain technology. As soon as the crypto investors invest in these projects, the fraudulent operators say goodbye with their investors' funds.
3.) The third most common scam in the Metaverse is speculation in virtual land and real estate, the value of which is inflated by artificial hype to induce panic selling among crypto users and rake in excessive profits.
The Bureau of Inter-Agency Cooperation to Combat Financial Crimes also urges Chinese crypto users to report such projects and suspicious activities. The Google translation of the warning reads:
“These fraudulent activities are cloaked under the guise of the Metaverse, but pose no less of a threat to investors. The public is called upon to be careful in this virtual space as well, so as not to fall for fraud.”
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