Chinese banking regulator warns of fraud risks in the metaverse

The scammers pass off their projects as genuine and then disappear with the victims’ investments

18.02.2022 - 13:45

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1 min

What’s new? The China Banking and Insurance Regulatory Commission has issued a warning about the risks to the public of fraudulent metaverse projects. The notice stresses that the hype raised has made them a prime target for fraudsters and scammers illegally collecting money under the name of such projects.

Statement of the regulator

What does the official warning say? The regulator has highlighted several ways in which scammers are making a profit. The first and most common form involves projects promising high-tech integration. They often lure investors by promising high returns. The scammers then disappear with the investors’ money.

What else has the regulator warned about? The second form has been play-to-earn (P2E) blockchain projects, where scammers promise high returns for investing in a native game token and often abscond with the funds after reaching their goal. A third known scheme looks to inflate the value of real estate in the metaverse to cause panic buying among users.

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