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Avoid Talking About Investing With Avatars
By Sandeep Kasalkar
The phrase “Metaverse” describes a collection of independent or related online virtual worlds. These virtual worlds employ virtual or augmented reality technologies to provide consumers with an immersive experience.
Fraudsters will follow the opportunity presented by the new businesses or technology. And the metaverse is no exception. Absence of regulatory control in the metaverse and the flexibility to operate from anywhere in the globe, the fraudsters may easily conceal their schemes. Furthermore, security flaws already present in platforms, and the capacity to create bogus metaverse experiences, can lead to hacks, fraud, or the loss of users’ assets.
Scams involving investments in metaverse-focused businesses or technology might include unlawful stock promotions, pump-and-dump efforts, and Ponzi schemes. These scams already exist in the real world. Scams in the metaverse’ virtual environments might resemble those in the real world, they are more likely to include virtual items like cryptocurrency or virtual real estate.
Example: Five state securities authorities brought enforcement actions in May 2022 against a company they suspected of having links to Russia for allegedly soliciting American citizens to participate in fraudulent metaverse ventures. The fraud involves selling NFTs to investors that purported to grant ownership rights in a metaverse casino as well as the ability to partake in the casino’s revenues. Investors would allegedly profit when customers paid to play virtual craps, blackjack, and other games while posing as avatars. Authorities also charged the club with lying about its affiliation with the real-world Flamingo Casino in Las Vegas and failing to provide evidence to support allegations that it was purchasing a virtual property from rapper and TV personality Snoop Dogg.
Safeguard Yourself Against Metaverse Scams
If you are considering investing in this developing business, it is crucial to keep informed as new metaverse-focused scams and frauds are likely to emerge. In the metaverse, you need to take great care to protect your passwords, bank information, and private data. Here are some easy precautions you may take:
- Make sure you are aware of the dangers and at ease with them, including the chance that you may lose all of your money.
- Check with one or more securities regulators to see if the investment and the person or business selling the investment plan are registered.
- Avatars, or digital representations of people that may take on any look or personal feature, should not be used for financial discussion or exchange of personal or account information.
- Watch out for incorrect information, such as fake news and online celebrity rumors, as con artists create hype by falsely claiming that a famous person or public figure is investing in technology.
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