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Alert raised on growing metaverse-related scams and illegal fundraising by Chinese financial services regulator amid market frenzy
- The China Banking and Insurance Regulatory Commission said criminals are now getting involved in various metaverse investment projects and blockchain games
- The warning comes at a time when the metaverse has become popular with Chinese technology companies and a growing number of investors
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China’s financial services watchdog on Friday warned the public to stay alert to illegal fundraising schemes and scams related to the metaverse, as authorities amplify the potential risks involved in what some consider to be the next phase of the internet.
Criminals have been busy “absorbing capital” from suspected illicit fundraisers and rackets, which are in the guise of metaverse investment projects and blockchain games, according to the China Banking and Insurance Regulatory Commission (CBIRC), in a statement published on its website and official social media.
The warning comes at a time when the metaverse – the concept of a shared virtual environment that users access via the internet – has become increasingly popular with Chinese technology companies and a growing number of investors. This enthusiasm is reflected in various enterprises that have linked their businesses to the concept, while books about the metaverse have become bestsellers.
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The CBIRC indicated that there are four common tricks used by metaverse fraudsters. It said some cook up fake investment opportunities by packaging metaverse-related activities – including video gaming, artificial intelligence and virtual reality – into attractive hi-tech projects.
02:17
Tech companies in China chase metaverse opportunities in immersive virtual online world
Tech companies in China chase metaverse opportunities in immersive virtual online world
Others promote metaverse games that promise high returns by simply playing them. These scammers convince people to invest by asking them to buy virtual currencies and certain in-game assets, according to the CBIRC.
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There are also fraudsters who hype up the concept of metaverse real estate, enticing people to get in on this new virtual property market to “rake in money”, the financial services watchdog said.
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