Thursday, September 29, 2022

China Regulatory Authorities Identifies Metaverse as Scam, Warns Investors

The Chinese government has been relentlessly wading off fraudulent activities in the country although thousands of people still fall victim to fraud. In this regard, one of the country’s regulators, the China Banking Insurance Regulatory Commission (CBIRC) has issued a warning to the public against using the “metaverse” as a basis for carrying out illegal activities.

China Banking Authorities said in a statement published on its website that some companies are suspected of carrying out illegal, fraudulent, and criminal activities with an undertone linked to the blockchain world. The statement also urged the community to be very vigilant and self-conscious so as not to fall victim and if anyone is suspected, it should be reported to necessary authorities.

The official warning pointed at four ways in which fraudsters are wrongfully making huge profits making use of metaverse as the basis of their fraud.

The first and most widespread scam is the fabricating of a false metaverse investment project. The fraudsters in this case promise high-tech investment projects with a well-packaged name games production, and artificial intelligence amongst others making the investors believe in them and afterward get away with their funds.

The second most dominant metaverse scam is Blockchain Game (Play-2-Earn) where these supposedly malicious actors promise to give huge profits to investors for games played in a short while and also trick them to buy game equipment in exchange for coins in which they often cart away with user’s funds thereafter.

Another prominent scheme used by the scammers is by increasing the price of the virtual estate creating tension amongst users thereby making them want to sell and also engaging in meta-universe virtual coins trade-offs in a bid to earn profit illegally. They even go as far as claiming that the virtual coin issued is the “biological common currency”, forcing the public to purchase and also invest.

A translated version of a statement from the Office of Inter-Ministerial Joint Conference on Disposal of Illegal Fund Raising urged the public to be careful of such projects and report any suspicious activity to necessary authorities. The authorities term the illegal activities under the banner of “Metaverse” as “attractive and deceptive” making the partaker prone to property damage.

Last year, China prohibited financial institutions from engaging in any crypto transaction as well as crypto mining. The government is majorly concerned about the effect of crypto mining on the environment and people using digital currencies for fraud and laundering of money thereby making the country push its own Digital Yuan Currency, whose trials extended to the Beijing Olympics as reported by CryptoMarketsBeat.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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