After going against digital currency activities in the country, China has wholly embraced the idea of investing in the metaverse and making the most of it to boost its economy.
Following regulations and approval from the government, the metaverse industry is now taking shape in the country. The financial sector regulator of the government raised the alarm about the rising fraud going on due to the metaverse, despite measures to curb it.
China’s banking and financial regulatory body has released a statement warning investors to be wary of potential scams as many organizations use the metaverse to carry out illegal activities.
The country’s regulatory body states the metaverse comes with many prospects for individuals and companies to maximize and use its opportunities for gains. However, the rate at which metaverse-related fraud is happening calls for caution. Hence, the body will continue to ring the alarm bells to safeguard investors and their funds against illegal fundraising.
Illegal Metaverse Fundraising On The Rise
The Chinese finance regulator has revealed that it is trying hard to crack down on metaverse-related fundraising activities that are deemed to run against the law, and authorities will take appropriate steps to deal with the problem.
The regulatory agency raised the alarm on Friday, citing unknown groups running fraudulent metaverse investment schemes soliciting public funds in the scams. Chinese authorities targeted two firms suspected of fraud, namely Metaverse Chain Tour and Metaverse Investment Project.
According to the regulatory body, criminal elements target unsuspecting individuals and investors by promoting the metaverse and portraying a project as bringing more than the invested amount. Additionally, the agency went on to bring out other parts of the fraud: digital real estate and metaverse currency.
The Metaverse As Explained
The metaverse is the next generation of Web 3.0, where users can play, connect, and socialize in a virtual environment. Metaverse is powered by virtual reality, which enables people to do what they want to do in the virtual world via unique gadgets.
Interestingly, the crypto industry insiders believe that cryptocurrency goes hand in hand with the metaverse. Users would be able to earn tokens after carrying out a given activity.
The warning for the People’s Republic of China came amid increased interest in the metaverse by companies and individuals alike. Considering the vulnerability of people to scams, the Chinese government is putting the necessary action and information out about the activities of fraudsters using the metaverse as their focal point.
In China, large private sector companies have since joined the metaverse train, especially tech companies. Alibaba, Tencent, and NetEase are some of the notable players who keyed into the metaverse project in China.
The country has even established an agency to oversee the transitional affairs in the regulated part of the metaverse, consisting of social media, virtual reality, and gaming.
Admittedly, investors are open to exploring the Chinese metaverse ecosystem after the favorable policies the government rolled out towards ensuring the smooth running of the project in China.