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NASAA CAUTIONS INVESTORS ABOUT INVESTMENT SCAMS IN THE METAVERSE – Yahoo Finance

WASHINGTON, Aug. 31, 2022 /PRNewswire/ — The North American Securities Administrators Association (NASAA) today issued an Informed Investor Advisory cautioning investors to protect themselves from investment scams and frauds offe…….

WASHINGTON, Aug. 31, 2022 /PRNewswire/ — The North American Securities Administrators Association (NASAA) today issued an Informed Investor Advisory cautioning investors to protect themselves from investment scams and frauds offered in the unregulated metaverse, the online virtual “world” that provides users with immersive experiences through virtual or augmented reality technologies.

Logo of North American Securities Administrators Association (NASAA) (PRNewsfoto/North American Securities Administrators Association (NASAA))

NASAA today issued an advisory cautioning investors to protect themselves from metaverse investment scams and frauds.

According to the advisory, the metaverse may offer numerous potential investment opportunities, including virtual real estate, nonfungible tokens (NFTs) and other businesses. But the advisory warns that the lack of regulation in the metaverse, combined with the ability to operate from anywhere in the world, make it easy for fraudsters to hide their financial schemes. In addition, security lapses on some developing platforms and the ability to build fake metaverse experiences can lead to hacks, fraud, or the theft of users’ funds.

“Investors should keep in mind that every investment comes with risk, and no investment can be guaranteed against loss,” said NASAA President and Maryland Securities Commissioner Melanie Senter Lubin. “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 advisory, which was developed by NASAA’s Investor Education Alerts and Advisories Project Group, explains the  risk of metaverse-focused investment scams and frauds, and how investors can protect themselves if they are considering investing in this emerging realm.

“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.

NASAA provides the following tips to help investors identify common telltale signs of possible investment fraud in the metaverse:

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