Many companies and investors are betting that the emerging metaverse will be the future of the internet — but as with any nascent technology, the metaverse is rife with scammers and fraudsters, some of whom target investors, according to the North American Securities Administrators Association.
The association has issued an investment-advisory warning about scams, both inside virtual worlds and out in the real world touting investments related to the metaverse.
NASAA reminds investors that due diligence is necessary for any investment of real assets, warning that the “lack of regulation in the metaverse and the ability to operate from anywhere in the world make it easy for fraudsters to hide their schemes.”
In particular, the association says to “steer clear of metaverse crypto or nonfungible” investments, in which scammers have pilfered billions of dollars through pump-and-dump and other schemes.
NASAA also suggests that investors should be cautious about celebrity endorsements and fake news.
The association further warns against accepting investment advice inside the metaverse, suggesting that investors check with the Securities and Exchange Commission and the Financial Industry Regulatory Authority’s BrokerCheck to ensure that the people and companies they’re dealing with are registered.
NASAA also says that investors should avoid accepting investment advice from avatars.
“The metaverse offers the opportunity to experience fully immersive virtual worlds that may seem very much like the physical world we wake up to [every day], as well as fantastical worlds built on alternate realities,” the association says. “Nevertheless, people should know that the rules that apply to investments in the physical world also apply to investments in virtual worlds.”