NFT market activity and interest in the Metaverse continue to attract media attention. In January, NFT's trading activity hit a record high before plummeting in February. Despite the current cryptocurrency market environment (here you can find out how buy bitcoin and beyond), more mainstream players are exploring NFTs and buying land in the metaverse.
As a result of increased activity, illicit activity has also been on the rise, forcing regulators to take notice.
Illicit activity increases in the NFT market and in the metaverse
While the cryptocurrency market is no stranger to hackers, NFTs have also become the target of cybercriminals. Art theft, plagiarism, carpet theft and wash trading have made headlines in recent months.
More alarming, however, was the rise in cyberbullying and sexual harassment in the Metaverse. In late January, we reported that the South Korean government had to take steps to curb sexual harassment in the Metaverse. The South Korean Communications Commission has established a council to address user protection in the Metaverse. The council will also deal with sexual harassment involving minors.
South Korea was not the first to report sexual harassment in the Metaverse. In December, the New York Times and MIT Technology Review had both reported cases of sexual harassment in the Metaverse.
The governments of India, the United Kingdom, and the United States are also increasing scrutiny on NFTs and the Metaverse. China was among the first, however, to talk about the risks associated with digital goods and virtual reality.
With iconic fashion brands, fast-food chains, music and sports entering the Metaverse, more regulatory oversight will be needed.
South Korea's Financial Supervision Service (FSS) becomes active
As regulatory activity picks up, the South Korean government hit the news once again this week. On Monday, the FSS announced it will strengthen monitoring of newly traded assets, including NFTs and also the Metaverse.
The news follows the 7 guilty verdicts for V Global executives, including the CEO who received a 22-year prison sentence. In January, news that South Korean prosecutors wanted to lock up cryptocurrency criminals for life raised the prospect of heavy 7-year sentences.
Severe punishments and strong regulatory oversight could put South Korea at the forefront of innovation. Tackling the threat of cybercrime can only be good for both the NFT market and the Metaverse.