Following the elimination of crypto mining as well as trading across China, the next concern of the country’s authorities deals with the increasing frauds across the projects of the metaverse space. The Banking and Insurance Regulatory Commission of China released a risk caution for the public regarding the scam-based metaverse projects.
The respective notice focuses on how the metaverse has been turned into a chief target of the fraudsters and scammers who illegitimately utilize the space and make it notorious by ripping money out of the hard-earned funds deposited by the common masses.
The official caution makes it clear that several methods are utilized on the behalf of the swindlers to illegally make gains through metaverse being a convenient field to carry out their scams. The initial, as well as, the most radically found fraud takes account of projects that promise high-tech integration like virtual reality support as well as artificial intelligence.
The respective projects frequently attract investors by assuring to offer high returns. After that, the scammers take investors’ funds with them.
The other similarly significant type of metaverse frauds deals with the P2E (play-to-earn) projects that run over blockchain and the scammers provide false guarantees to return high yields on investments from the targeted investors for the local gaming tokens with consequently taking those funds with them after getting their required amount. The other prominent kind of scheme utilized by such frauds is to hype up the metaverse-based real-estate to spread panic between the users.
The Joint Inter-Ministerial Conference over Disposal of Illegal Fund Raising directed the common masses to have more awareness about these projects and then report the potentially suspicious operations to the respective authorities.
A Google-based translation of the document mentions that the scamming operations across the Metaverse sector, which is deceptive and more attractive, can potentially lead the participants towards property damage. The community is requested to delve deep into the identification and risk prevention capabilities, along with keeping away from being cheated.
Notwithstanding an outright prohibition over the utilization as well as mining of crypto across China, the government has given additional relaxation in the case of the projects comprising non-fungible tokens (NFTs) and the metaverse. That is why many tech giants such as Alibaba, Huawei, and Tencent have instantly filed to acquire metaverse trademarks. Even the utilization of metaverse and blockchain has been incorporated by Shanghai in the five-year agenda for open services.