The Chinese Banking and Insurance Regulatory Commission has raised concerns about defrauding operations on Metaverse. The regulatory body sounded a warning to investors about swindling engagements in Metaverse. The body underlined how the increasing attention on the initiative had caught the attention of swindlers. According to The Chinese Banking and Insurance Regulatory Commission, Fraudsters now launch deceitful projects to scam investors of their investment.
Highlighted scamming methods by the Chinese Banking and Insurance Regulatory Commission
Furthermore, the body listed four diverse methods by which scammers are illegally turning gains via Metaverse. The most popular of their deceitful means is launching artificial intelligence and virtual reality projects, with the promise of a high dividend for investors. Once investors start investing in the project, these mischievous fraudsters then initiative a rugpull and make away with invested funds.
Additionally, Another fraudulent method highlighted by the Chinese Banking and Insurance Regulation Commission is the Play-to-earn initiative. With this, fraudsters pledge lucrative earnings to investors if they invest in their in-game tokens. But they often flee with the accumulated investment immediately it gets to their desired target. The body also listed a dubious way of praising and promoting real-estate initiatives on the platform to influence investors. This method is aim at creating anxiety among investors, thus, prompting them to invest.
Another governmental body, the Inter-Ministerial Joint Conference on Disposal of Illegal fund also added to the observation. The body beseeches investors to be conscious of deceitful projects and to reveal any questionable project to enforcement agencies. It further added that deceitful projects on Metaverse are lucrative but dangerous, therefore exposing investors to scams. The body encouraged investors to improve their knowledge about how to detect fraudulent projects on the platform.
The situation of Crypto in China
In 2019, The Chinese government placed a ban on cryptocurrency due to fear of money laundering and terrorism. The government has overtly warned that anyone caught will be prosecuted. Last June, Chinese financial institutions issued a strong warning that Chinese investors have no exemption to keep investing in crypto. Moreso, a definite ban landed on banks and payment platforms to desist from supporting crypto transactions.
However, The government is relatively relaxing towards Metaverse and NFTs initiatives. The development allows notable digital companies in the country to own exclusive trademarks for metaverse. So far, the Chinese government is yet to place Metaverse and NFTs under the ban, but the increasing scams on the platform might force an intervention.