More and more money is invested in the Metaverse as popularity picks up. Unfortunately, because this industry is still unregulated, cybercriminals have many opportunities to exploit.
The shared virtual environments and Metaverse are still very new, and business is already highly lucrative at this point as companies and individuals are spending billions of dollars on digital assets. Unfortunately, the rapid influx of cash and completely unclear regulation of the new space makes the Metaverse a hot spot for fraud and cyber-attacks.
Metaverse scams are based on blockchain smart contracts that run automatically when certain conditions are met. Although smart contracts are supposed to ensure that the buyer gets what they paid for, criminals are increasingly using fake or misleading “smart contracts” that do not work as advertised.
The scam typically involves tricking the target into approving a transaction that gives 3rd party services hijacked by hackers to access their wallet. Unfortunately, many people have fallen for it because they do not research the company they are trying to do business with. Another factor contributing to online scams is when scammers lure users using terms associated with a trusted brand.
After the scam, there's not much anyone can do since once things are on the blockchain, they remain that way permanently and allow the hackers to move onto the next target.
The basis for doing business in the Metaverse should be that asset owners and buyers refrain from sharing information about their assets. Always read the contract before executing a transaction, and it is a good idea to move cryptocurrency from your main wallet to a separate one. The most effective defense against metaverse scams is educating yourself and staying up to date with the latest threats.
These new strains of cyber threats are specific to the Metaverse and the technologies that power it, presenting various challenges regarding intellectual property protection and secure financial transactions.
Well-known brands and corporations also trade virtual products, and blockchain guarantees successful transactions, but fake NFT's can cause irreversibly damage to brands.
The Metaverse is a chaotic place right now, and there's no way to guarantee the legitimacy of a particular vendor due to regulatory gaps.
Cryptocurrency regulations and laws work hand in hand, but that doesn't mean they are fully developed and independent. Many things depend on users and tech companies to enforce specific standards in the Metaverse and minimize vulnerabilities.
Unregulated cryptocurrency transactions will continue to enable criminals if we do not enforce strict standards to minimize vulnerabilities.