The North American Securities Administrators Association (NASAA), which represents state and provincial securities regulators in the U.S., Canada and Mexico, called on investors to protect themselves from investment scams and frauds offered in the unregulated metaverse.
In an advisory, NASAA said the metaverse may offer various potential investment opportunities, including virtual real estate, nonfungible tokens and other businesses.
But it warned that the lack of regulation and the ability to operate from anywhere in the world make it easy for fraudsters to hide their financial schemes.
Security lapses on some developing platforms and the ability to build fake metaverse experiences can also result in hacks, fraud, or the theft of users' funds.
"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, Board member, and Massachusetts Securities Division Director and General Counsel.
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