Chinese banking regulator warns against fraud risks in the metaverse

After eradicating crypto trading and mining in the country, the Chinese government’s next concern lies with the growing scams around the metaverse projects.

The Chinese Banking and Insurance Regulatory Commission issued a risk warning for the common public against fraudulent metaverse projects. The notice highlighted how the buzz around metaverse had made it a primary target of scammers and fraudsters illegally raising money in the name of such projects and robbing people of their hard-earned money.

The official warning highlighted four different ways in which fraudsters are illicitly making profits using metaverse as the premise of their fraud. The first and most common form of the scam includes projects promising high-tech integration, such as artificial intelligence and virtual reality support. These projects often lure investors by promising high returns. Then the fraudsters get away with the investor funds.

The second most common form of metaverse scams is blockchain play-to-earn (P2E) projects, where scammers promise high profits for investing in the native gaming token and often run away with funds once they reach a set goal. Another prominent scheme such projects use includes hyping up the metaverse real-estate to induce panic buying among users.

The Office of Inter-Ministerial Joint Conference on Disposal of Illegal Fund Raising requested the common public to be more aware of such projects and report any suspicious activity to authorities. A Google translated version of the official warning read:

“The fraudulent activities under the banner of “Metaverse”, which is more attractive and deceptive, and participants are prone to property damage. The public is requested to enhance their awareness of risk prevention and identification capabilities, and beware of being deceived.”

Related: Fake alert! New projects pose as prominent brands to lure crypto investors

Despite a blanket ban on the use and mining of cryptocurrencies in the country, the Chinese government has shown more relaxation towards nonfungible token projects and metaverse. This is the reason why several tech giants including Tencent, Huwaei and Alibaba have rushed to file for metaverse trademarks. Shanghai even included the use of blockchain and metaverse for public services in its five-year development plan.

All Dutch and English crypto news!

Dollar Cost Averaging or Lump-sum: Which Bitcoin strategy works best regardless of price?

Bitcoin (BTC) has declined by more than 55% six months after it reached its record high of $69,000 in November 2021. The massive drop has left...

Cointelegraph Store: Introducing Bitcoin Pizza Day merch for crypto OGs

Twelve years ago today, on May 22, 2010, programmer and early Bitcoin (BTC) miner Laszlo Hanyecz made history when he traded 10,000 BTC for two...

Terra’s meltdown highlights benefits of CEX risk-management systems

The collapse of Terra's ecosystem - namely, native coin LUNA and algorithmic stablecoin TerraUSD (UST) - rocked the wider blockchain and cryptocurrency ecosystem. Not only...

6 Questions for Sonali Giovino of Defiyield

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep...

Beste exchanges

Koop je crypto bij Bitvavo