Alabama Securities Commission Warns of Metaverse Scams

MONTGOMERY, Ala. (WSFA) – The Alabama Securities Commission wants to warn Alabamians to beware 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 of the Alabama Securities Commission. “It’s like a virtual world that you can access through a game console or through Oculus glasses.”

The digital space reflects reality with concerts, house shopping and interactions with people around the world. To participate, users convert real money into cryptocurrency or non-fungible tokens.

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

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

“I tell people to be very careful,” Senn said.

Investment scammers in the metaverse exhibit some of the same warning signs as the real world.

“If someone offers you a 25% return on investment, that’s a red flag. If the person soliciting the investment does not disclose the details of the investment. If they’re not registered or licensed to do business, that’s a big deal,” Senn said.

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

“Exercise the same caution as you would in the physical world. In a virtual reality, it can leave you pretty much broke,” she said.

Senn says Millennials and Gen Z are being victimized because they are the ones investing in technology. But as it becomes more accessible, anyone can fall victim to it.

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Luz W. German