NASAA issues metaverse investment fraud protection guidance

The North American Securities Administrators Association (NASAA) has issued guidance that seeks to help protect investors from unregulated metaverse investment scams and frauds.

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The Informed Investor Advisory encourages investors to protect themselves within the online virtual world, providing users with immersive experiences via virtual or augmented reality technologies.

“Investors should keep in mind that every investment comes with risk, and no investment can be guaranteed against loss,” NASAA President and Maryland Securities Commissioner Melanie Senter Lubin said. “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.”

The NASAA maintains while the metaverse may offer numerous potential investment opportunities that include virtual real estate and nonfungible tokens (NFTs), the organization cautions a lack of regulation combined with the ability to operate from anywhere in the world make it easy for fraudsters to hide their financial schemes.

Informed Investor Advisory tips include investors understanding the risks and ensuring they are comfortable with them; verifying the investment and person/entity offering such are registered with one or more securities regulators; avoiding discussing investments or sharing personal or account information with avatars; and avoiding metaverse crypto or NFT investment offers, as well as metaverse investment advice.