China's Banking and Insurance Regulatory Commission has issued a subtle warning to the public about the risks of fraud and scams associated with the burgeoning Metaverse space.
China warns against Metaverse scams
The warning explains how the niche has become a new home for bad actors who wish to engage in illicit activities to illegally raise money by deceiving unsuspecting individuals about their hard earned money.
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While highlighting the various methods that scammers use in the metaverse business, the official warning mentioned projects that promise high technology integration, such as artificial intelligence and virtual reality support, saying they only come to attract customers. investors to rob them.
The warning identified that metaverse scams could also come in the form of play-to-earn projects, which often promise participants huge returns on their investments.
He stated that once such a project achieves a specific goal, they abandon the project and run with people's investments.
He further added that metaverse scams could also take the form of hype. In this situation, scammers regularly talk about the metaverse project to give it a false popularity and importance and force people to invest. An example of this is the level of hype surrounding the real estate metaverse.
A translated version of the statement from the Office of Inter-Ministerial Joint Conference on Disposal of Illegal Fund Raising urged the public to be wary of such projects and to report any suspicious activity to the relevant authorities:
Fraudulent activities under the banner of the "Metaverse", which is more attractive and deceptive, and participants are prone to property damage. The public is requested to raise their awareness of risk prevention and identification skills, and to guard against being deceived.
Chinese crusade against encryption
This isn't the first time the Chinese government has warned against the metaverse. In December, the country's state media issued a warning about virtual property sales, claiming they are risky in terms of volatility, fraud, illegal fundraising, and money laundering.
In particular, we recently reported that Chinese authorities arrested eight people involved in a cryptocurrency scam and seized digital assets, homes, cars and other expensive items obtained through the scam.
China in 2021 cracked down on the entire cryptocurrency industry. The country banned crypto mining activities and subsequently outlawed cryptocurrency trading with the threat of sanctioning defaulters.