China Warns of Flimflam, Fraudulence, and Fakery in the Metaverse
China has taken a relatively hard stance toward cryptocurrencies and their supporting ‘organizations’, above and beyond the usual bans on ‘inflammatory content’ or ‘processes antithetical to the cultural and personal well-being of the Chinese population’, but when it comes to the manifestation of the Metaverse, it is much harder for the Chinese state to codify rules, given the ephemeral nature of the Metaverse itself. That said, the China Banking & Insurance Regulatory Commission issued a ‘Risk Reminder’ yesterday that presented warnings about potential illegal fundraising schemes that seem to be surfacing as the Metaverse garners headlines.
“Recently, some lawbreakers have rubbed off on hot spots (Google (GOOG) translation) and absorbed funds in the name of "Metaverse Investment Project" and " Metaverse Chain Tour ". They are suspected of illegal fundraising, fraud and other illegal and criminal activities,” is how the article began, and then went into more specifics as to what the scams were and what to watch out for, with the first being the fabrication of false Metaverse investment projects, such as game publication, artificial intelligence and virtual reality projects that publicize high returns in order to raise funds, although that seems of little difference from the multitude of scams that US investors face whenever a technology fab comes to the forefront.
The note goes further, citing those that claim “you can make money while playing games”, with the warning that the exchange of virtual currencies and the purchase of the game equipment needed to ‘farm’ such high return schemes is both costly and garners the risk that such operators may close the game at will (this has happened recently) and made it almost impossible for players to retrieve both their original investment and any profits that they might have thought they made. Then the warning heads into one of our favorite areas, that of Metaverse ‘real estate’, where the ‘lawbreakers’ exaggerate the expectation of virtual real estate price increases and artificially create ‘the illusion of panic buying’ to induce trading, but the most telling is the reference to virtual currencies’ that criminals induce the public to buy in anticipation of it becoming ‘the Metaverse currency’ in the future, while manipulating the price and setting withdrawal rules that generate high fees or make it almost impossible to cash out.
While there doesn’t seem to be anything mentioned in the note that we haven’t seen at least a few times, it seems a bit more comprehensive that the warnings we have seen from the FTC, which are focused on scams where unsuspecting folks are conned into making various payments (IRS, utility company, outstanding tickets) by converting their hard-earned cash into crypto at an ATM (they will provide you with the nearest one and stay on the line as you make the transaction) when they will send you a QR code that will transfer the money into their account, forever lost to you. Since that would likely trigger wire fraud, it would be relatively easy to prosecute should the fraudster be found, but rules about some of the more esoteric schemes mentioned in the Chinese note have yet to be written or even contemplated. Warnings are a start as they alert at least a part of the population to such antics, but there are many across the globe that are gullible enough to believe that they can get something for nothing and will give fraudsters a whole new platform in which to work. If you haven’t seen “Glengarry Glen Ross” then you are ripe for a Metaverse scam.
“Recently, some lawbreakers have rubbed off on hot spots (Google (GOOG) translation) and absorbed funds in the name of "Metaverse Investment Project" and " Metaverse Chain Tour ". They are suspected of illegal fundraising, fraud and other illegal and criminal activities,” is how the article began, and then went into more specifics as to what the scams were and what to watch out for, with the first being the fabrication of false Metaverse investment projects, such as game publication, artificial intelligence and virtual reality projects that publicize high returns in order to raise funds, although that seems of little difference from the multitude of scams that US investors face whenever a technology fab comes to the forefront.
The note goes further, citing those that claim “you can make money while playing games”, with the warning that the exchange of virtual currencies and the purchase of the game equipment needed to ‘farm’ such high return schemes is both costly and garners the risk that such operators may close the game at will (this has happened recently) and made it almost impossible for players to retrieve both their original investment and any profits that they might have thought they made. Then the warning heads into one of our favorite areas, that of Metaverse ‘real estate’, where the ‘lawbreakers’ exaggerate the expectation of virtual real estate price increases and artificially create ‘the illusion of panic buying’ to induce trading, but the most telling is the reference to virtual currencies’ that criminals induce the public to buy in anticipation of it becoming ‘the Metaverse currency’ in the future, while manipulating the price and setting withdrawal rules that generate high fees or make it almost impossible to cash out.
While there doesn’t seem to be anything mentioned in the note that we haven’t seen at least a few times, it seems a bit more comprehensive that the warnings we have seen from the FTC, which are focused on scams where unsuspecting folks are conned into making various payments (IRS, utility company, outstanding tickets) by converting their hard-earned cash into crypto at an ATM (they will provide you with the nearest one and stay on the line as you make the transaction) when they will send you a QR code that will transfer the money into their account, forever lost to you. Since that would likely trigger wire fraud, it would be relatively easy to prosecute should the fraudster be found, but rules about some of the more esoteric schemes mentioned in the Chinese note have yet to be written or even contemplated. Warnings are a start as they alert at least a part of the population to such antics, but there are many across the globe that are gullible enough to believe that they can get something for nothing and will give fraudsters a whole new platform in which to work. If you haven’t seen “Glengarry Glen Ross” then you are ripe for a Metaverse scam.
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