China Warns About Frauds in the Metaverse

The Chinese government has issued a notice against various frauds associated with the metaverse, Coinspeaker reported Friday (Feb. 18).

A notice by the Chinese Banking and Insurance Regulatory Commission listed four methods used to scammers acting as metaverse developers.

The most common scam is enticing investors with promises of integrating artificial intelligence and virtual reality, with the thieves vanishing after they get the capital.

Then there are “highly efficient play-to-earn projects,” in which fraudsters promise huge gains from gaming tokens.

Other schemes, according to the article, include “exaggerating” about metaverse real estate to drive up purchases.

The Chinese government said people should be cautious when buying into the metaverse and report any “dubious activities.”

The report notes that several Chinese tech companies like Tencent, Huawei and Alibaba have already filed metaverse trademarks. Shanghai has been working on using blockchain and the metaverse for general services.

Read more: $8T Metaverse Market Potential May Hinge on Regulation in China

PYMNTS wrote that China’s market for the metaverse could dominate the sector, with numerous companies driving an $8 trillion presence.

But that will depend on how things are regulated. The Chinese government has expressed caution about metaverse development, in contrast to companies like Meta Platforms and Microsoft.

And in the U.K., strict regulations are also possible. The Online Safety Bill would impose an “online duty of care” on platforms like Meta and other tech giants, and would necessitate removing illegal content.