China warns against using the metaverse for illegal fundraising

The China Banking and Insurance Regulatory Commission has cautioned against using the metaverse to raise funds illegally. A report unveiled this news earlier today, citing a statement on the regulator’s website. The watchdog pointed out that some firms are engaging in illegal fundraising, fraud, and virtual real estate speculation.

Urging citizens to be vigilant, the agency said,

Beware of being duped, and if you find clues of suspected illegal crimes, please actively report this to the relevant local departments.

This warning comes amid increasing interest in China’s metaverse sector. Chinese investors and entrepreneurs have been diving into the metaverse as the country’s real-life real-estate market flounders. As for individuals, the metaverse offers the freedom to choose lifestyles.

Leading tech companies like Alibaba and Tencent have also made metaverse moves. Their ambitions stem from the belief that the metaverse is the future of social networking. To avoid missing out, these companies are dabbling in the sector with hopes of engaging the next generation of internet users.

Experts say China might introduce strict metaverse regulations

With the increasing hype around the sector, China formed an industry body to focus on metaverse development. Dubbed China Mobile Communications Association, the entity is registered with the country’s Ministry of Foreign Affairs. After onboarding 17 new firms earlier this week, the association boasts 112 members.

By creating this body, China is dealing with the metaverse similarly to how it approached the blockchain. The country formed the National Blockchain and Distributed Accounting Technology Standardization Technical Committee to seize blockchain opportunities.

As a result of the influx of investors and companies in the metaverse, experts claim China might enforce strict regulations to rein in the industry.

For instance, Du Zhengping, the Head of the China Mobile Communications Association’s metaverse industry committee, said,

Traditional Chinese internet businesses developed first and were then regulated. Industries like the metaverse will be regulated as they are built.

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Considering the country banned cryptocurrencies in the past year, experts believe China’s metaverse will not feature digital currencies.

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