Alabama Securities Commission warns of metaverse scams

MONTGOMERY, Ala. (WSFA) – The Alabama Securities Commission wants to warn Alabamians to be wary of scams in a growing online world called the metaverse. It is investigating two potential fraudulent companies so far.

“If you grew up in the 90s, the metaverse is ‘Super Mario Brothers,’” said Amanda Senn, chief deputy director for the Alabama Securities Commission. “It’s like a virtual world that you can access through a gaming console or through Oculus glasses.”

The digital space mirrors reality with concerts, homebuying and interactions with people across the world. To participate, users convert real money into cryptocurrency or non-fungible tokens.

“Most developers and investment bankers, they see an opportunity here to make money,” said Senn.

Unfortunately, that leaves room for real world scammers to take their scams to the metaverse.

“I tell folks be very wary,” said Senn.

Investment fraudsters in the metaverse have some of the same warning signs as the real world.

“If somebody’s offering you a 25% return on an investment, that’s a red flag. If the person soliciting the investment doesn’t disclose details about the investment. If they are not registered or licensed to do business, that’s a big one,” said Senn.

Senn added that virtual actions can have real-world consequences.

“Use the same caution that you would in the physical world. In a virtual reality can leave you virtually broke,” she said.

Senn says millennials and Generation Z are falling victim as they are the ones investing in the technology. But as it becomes more accessible, anyone can fall victim.

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Author: Traciwininger

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