China warns of fraud risks in the metaverse sector

The China Banking and Insurance Regulatory Commission (CBIRC) warned about fraud risks in the metaverse sector. According to the regulator, criminals are exploiting the hype around the concept to lure investors’ funds.

The CBIRC called metaverses “attractive but deceptive,” as users can lose their money if they are unaware of the associated risks.

The regulator named four product types through which scammers earn illicit profits:

• projects implying the integration of advanced technologies such as artificial intelligence and virtual reality, offering high returns;
• P2E—games promising profits from investments in native gaming tokens;
• digital-world real estate traded as NFT, with its value deliberately inflated;
• cryptocurrencies positioned as “metaverse money”.

The regulator urged the public to report such projects and other related activities to the competent authorities.

Earlier назвали NFT и метавселенные потенциальными схемами Понци. The Communist Party of China noted the current hype in the sector and said the developers of these projects deliberately inflated the hype.

In January 2022, it was reported that the National Intellectual Property Administration of China rejected several trademark applications related to metaverses.

Earlier in the same month, the SCMP reported on plans by the government-backed Blockchain Services Network to deploy infrastructure for NFT trading not related to cryptocurrencies.

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