The North American Securities Administrators Association (NASAA) has issued a warning to investors regarding “investment scams and frauds offered in the unregulated metaverse.”
The NASAA advisory states that the metaverse may offer investment opportunities, including virtual real estate, nonfungible tokens (NFTs) and other businesses. But it is buyer beware because there is a “lack of regulation,” and fraudsters can operate anywhere in the world, making it easy to perpetrate nefarious plots.
Melanie Senter Lubin, NASAA President and Maryland Securities Commissioner, said that every investment comes with risk and nothing can be guaranteed:
“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.”
Diane Young-Spitzer, NASAA’s Investor Education Alerts and Advisories Project Group Chair, Board member, and Massachusetts Securities Division Director and General Counsel, said it is important to do your research before investing in anything and to understand if the offering is registered with a securities regulator.
The advisory says, “steer clear of metaverse crypto or NFT investment offers and avoid investment advice in the metaverse. Also beware of “fake news” and “online celebrity gossip as scammers,” adding that social media can be used to “create buzz.”
In recent years, NFTs have rocketed in popularity – although some of the initial glow has worn off. As well, individuals may now purchase virtual real estate online as well as other digital assets.