Chinese banking regulator warns citizens against scams in the metaverse
After banning crypto trading and mining in its territory, the Chinese government is now concerned with combating the increasing scams around the metaverse projects.
The Chinese Banking and Insurance Regulatory Commission has recently issued a risk warning for its citizens against fraudulent metaverse projects. The notice has highlighted how the buzz around metaverse has resulted in making it a prime target of scammers and fraudsters who are illegally raising money in the name of similar initiatives to rob people ingenerously.
The official warning from the regulatory body has also outlined four different ways in which fraudsters have been illicitly making profits, mostly using metaverse as the premise of their fraudulent activities.
One of the most common forms of such scams include projects that promise high-tech integration like artificial intelligence and virtual reality support. These projects usually lure investors by promising them high returns, whereas the fraudsters get away with the investor funds.
The other common form of metaverse scams is when scammers employ blockchain play-to-earn (P2E) projects while promising high profits to invest in the native gaming token and then run away with funds once they have reached a set goal.
One more prominent scheme includes hyping up the metaverse real-estate for inducing panic buying among users.
The Office of Inter-Ministerial Joint Conference on Disposal of Illegal Fund Raising has requested the common public against such projects, warning them to report any suspicious activity to authorities.
Despite a ban on cryptocurrencies trading and mining in the country, the Chinese government has, however, been relatively relaxed towards nonfungible token projects and metaverse, which is why several tech giants, including Alibaba, Huwaei and Tencent, have rushed filing for metaverse trademarks.
Even Shanghai came forward and included the usage of blockchain and metaverse for public services in its five-year development plan.