Hacks, fraud, theft of investors’ funds and other well-established criminal activities are already being identified in the metaverse; and of course, no investment is guaranteed against loss.
“Our experience with so-called investment opportunities found in the metaverse, is that we see the same old financial scams simply dressed in new clothes and offered to investors in the metaverse. Investors need to be wary of any investment that is promising unrealistic returns with minimal risk.”
Spotting a scam
The latest warning comes hard on the heels of another NASAA warning about the rise of so-called ‘finfluencers’, another relatively new phenomenon.
The organization has issued guidance to help investors identify potential fraud and scams in the metaverse:
- Understand the risks and make sure you are comfortable with them, including the possibility that you might lose your entire investment.
- Verify that the investment and person/entity offering the investment scheme are registered with one or more securities regulators. To find the contact information for your securities regulator visit NASAA’s online directory.
- Avoid discussing investments or sharing personal or account information with avatars, or digital representations of users that can take on any appearance or personal attribute. Fraudsters may try to leverage shared interests, ideas, and goals to build trust and convince investors to invest in phony investment schemes.
- Steer clear of metaverse crypto or NFT investment offers and avoid investment advice in the metaverse.
- Be wary of misinformation including fake news and online celebrity gossip as scammers write fake online articles and social media posts that create buzz by falsely stating a celebrity or public figure is involved in technology investment.
“It is important to do research before participating in any investment opportunity to learn if it is a legitimate offering and whether it is registered with one or more securities regulators,” said Diane Young-Spitzer, NASAA’s Investor Education Alerts and Advisories Project Group Chair.
